The Organization of Petroleum Exporting Countries said on Thursday that existing production curbs would be relaxed slightly from January 1 by members of the OPEC+ alliance.
“Beginning in January 2021, [OPEC+] participating countries decided to voluntary adjust production by 0.5 million barrels per day,” it said in a statement.
OPEC and its allies, including Russia and Mexico, were originally scheduled to gather on Tuesday, but that was delayed while members reportedly met privately to agree on what to do next.
Those curbs were eased in August and the group had been planning to raise supply by another 2 million barrels per day from January.
Promising news regarding several coronavirus vaccine candidates sent oil prices higher in recent weeks, as traders bet that a vaccine will spur economic activity and encourage a return to travel.
Increasing oil demand in Asia and easing political uncertainty in the United States have also helped boost sentiment, said Hussein Sayed, chief market strategist at FXTM.
But the environment remains fundamentally unfavorable for oil prices in the short term, given continuing oversupply and weak global demand.
Prices will remain around current levels until planes, trains and cars start moving again with greater frequency and the vaccine rollout “starts to work its way through the global economy,” Stephen Innes, chief global markets strategist at Axi, said in a note to clients on Thursday.
— Chris Liakos contributed reporting.