Crude oil futures continued its upward trajectory during mid-morning trade in Europe on Oct. 25 as supply sentiment remains firm while OPEC+ holds steady on crude oil production rises.
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At 11:44 AM (1044 GMT) London time, the ICE December Brent futures contract was $0.61/b (0.71%) higher from the previous close at $86.14/b, while the NYMEX December light sweet crude contract was $0.73/b (0.87%) higher at $84.49/b.
"Comments from the Saudi energy minister which suggests that OPEC+ will continue to take a cautious approach in increasing output is likely providing some support to the market, particularly with other members of OPEC+ echoing the Saudi view," analyst from ING said Oct. 25.
Demand recovery from impacts of COVID-19 coupled with a conservative approach from the OPEC+ alliance to raise its crude oil production has been providing support to the complex lately.
The supply tightness is being further exacerbated by the inability of some OPEC+ countries to raise production quickly to match monthly increments in quotas.
Market participants are now gearing up for the next OPEC+ meeting scheduled for Nov. 4, where the alliance is expected to review production decisions for December.
Concerns over resurging rates of COVID-19 as many countries head into the winter months -- a time when flu infection rates usually rise -- have been subsided for now.
"For now, the market does not appear concerned about the COVID-19 outbreak in a number of provinces in China. China has, however, demonstrated multiple times that it is able to get outbreaks under control fairly quickly," they said.
"It seems that continuous global stock drawdowns are still widely anticipated in coming months and only a dent in demand growth could change the underlying sentiment," Tamas Varga of PVM Oil Associates said in the company's report on Oct. 25.