Oil takes breather after vaccine rally as stockpiles rise

TOKYO, Nov 25 (Reuters) - U.S. oil edged lower on Wednesday,
after an industry report showed crude stockpiles in the United
States rose against expectations, tempering a rally driven by
news that another vaccine against COVID-19 had proved effective
in trials.
West Texas Intermediate crude CLc1 was down 14 cents, or
0.3%, at $44.77 a barrel by 0035 GMT, after rising more than 4%
on Tuesday. Brent crude LCOc1 was yet to trade, having risen
almost 4% in the previous session.
The contracts closed at their highest since early March on
Tuesday, after a three-day rally pushed prices up around 8%.
"The energy sector is threatening to slam the door on (the)
COVID-era struggle and ride positive vaccine economics to the
next level," said Bob Yawger, director of energy futures at
Mizuho Securities.
AstraZeneca AZN.L said on Monday its COVID-19 vaccine was
70% effective in trials and could be up to 90% effective,
providing another weapon in the fight to control the pandemic
after positive results from other major pharmaceutical
developers. Any viable vaccine is not likely to be ready for mass use in
the next few months, meaning lockdowns and travel restrictions
will be in place into next year.
That makes it likely that the group known as OPEC+ will
continue production cuts into 2021 after a meeting set to start
on Nov. 30 following technical talks this week. The Organization of the Petroleum Export Countries (OPEC)
and other producers such as Russia in the OPEC+ grouping have
been withholding supplies to support prices after pandemic
lockdowns earlier this year caused an evaporation in demand.
They are due to increase production by 2 million barrels per
day, about 2% of global demand before the pandemic, from
January.
The American Petroleum Institute, an industry association,
said on Tuesday that U.S. crude stocks rose by 3.8 million
barrels in the week to Nov. 20 to around 490 million barrels,
against analysts' expectations in a Reuters poll for a build of
127,000 barrels. API/S
Official U.S. government crude inventory data will be
released later on Wednesday. EIA/S