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Oil heads for seventh weekly gain as vaccine rollouts support

Oil steadied near a nine-month high on Friday on track for a seventh weekly gain in a row as investors focused on the rollout of COVID-19 vaccines and looked past rising case numbers and tighter lockdowns in Europe.

Pfizer has applied for approval in Japan for its vaccine, which is being used in the United Kingdom and the United States. The U.S. Food and Drug Administration is also working towards approving Moderna’s shot.

Brent crude was down 12 cents, or 0.2%, at $51.38 at 0925 GMT, near the nine-month high of $51.90 hit on Thursday.

U.S. West Texas Intermediate (WTI) crude, which also reached its highest since March on Thursday, added 6 cents or 0.1%, to reach $48.42.

“Bullish momentum is taking a breather,” said Stephen Brennock of oil broker PVM. “Looking ahead, oil prices should continue to find support from the prospect of a COVID relief bill and accelerating vaccine rollouts.”

U.S. lawmakers are trying to agree a coronavirus relief package but a new potential roadblock emerged as some Senate Republicans insisted on language ensuring that expiring Federal Reserve lending programmes cannot be revived.

Oil gained support this week from weekly U.S. supply data showing crude inventories fell by 3.1 million barrels, more than the 1.9 million drop analysts had expected.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are supporting market prices by slowing the pace of a planned increase in supplies next year.

OPEC+ plans to add 500,000 barrels per day of supply in January, in a first step toward a 2 million bpd target, and the group will meet in early January to decide on next steps.
Source: Reuters (Addititonal reporting by Sonali Paul and Shu Zhang; Editing by David Clarke)

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