WASHINGTON (DTN) -- Oil futures on New York Mercantile Exchange and Brent crude on the Intercontinental Exchange dipped lower in early trade Wednesday after preliminary data showed U.S. crude and distillate stocks unexpectedly rose during the week ended Nov. 27 and Organization of the Petroleum Exporting Countries together with Russia-led partners delayed their decision on production levels until later this week, fueling uncertainty over the global supply-demand disposition as major economies begin to roll out vaccination programs.
Great Britain became the first country in the West to approve a coronavirus vaccine on Wednesday, sparking hope global economic growth and oil demand would return to pre-pandemic levels earlier than expected. The first doses of the experimental vaccine developed by Pfizer and German partner BioNTech are scheduled to be administered in the UK as early as next week. Goldman Sachs projects the UK will be able to vaccinate about 50% of its population by March, followed by the United States and Canada in April, with Japan and Australia reaching those levels by early May.
Until then, major economies in the West are gripped with a pandemic that has plagued growth for nearly a year now, with most models pointing to contraction in the Eurozone and U.S. economies in the first quarter 2021.
Recent industrial data out of eurozone showed demand-sapping lockdowns imposed in October slowed growth in manufacturing activity despite governments' attempts to insulate the sector from quarantine restrictions. In the United States, investors will be looking toward the release of weekly and monthly employment data this week, with consensus calling for a further slowdown in new hiring. In its monthly release, the Labor Department's nonfarm payroll report on Friday is expected to show 500,000 new jobs to have been created in November, down 138,000 from October, with private payrolls to have added 590,000 jobs last month, down from 906,000 in October.
Separately, oil traders anxiously await a decision by OPEC+ on whether the producer group will extend 7.7 million barrels per day (bpd) in production cuts through the first quarter of 2021 amid flagging demand. Earlier this week talks revealed a divide among heavyweights Russia, Saudi Arabia and the United Arab Emirates on the size and timetable for those cuts. Should OPEC+ fail to reach an agreement, the oil complex would get hit with a wave of selling as traders have priced in continued market support for a three-month extension for weeks.
Investors also await the release of weekly inventory data from the U.S. Energy Information Administration on tap for 10:30 a.m. ET. American Petroleum Institute reported late Tuesday commercial crude oil supplies rose by 4.146 million barrels (bbl) during the final week of November, missing most market calls for a draw. Gasoline stockpiles increased 3.402 million bbl in the week ended Nov. 27, surpassing the high end of expectations while distillate inventories added 334,000 million bbl.
In early activity, West Texas Intermediate crude futures for January delivery slipped 20 cents to trade below $45 bbl and ICE February Brent futures declined 13 cents to $47.28 bbl. NYMEX January ULSD futures traded little changed near $1.3478 gallon, while the January RBOB contract dipped 0.67 cents to $1.2137 gallon.
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