Brent crude prices hit their highest levels since March as news of a third promising coronavirus vaccine candidate spurred hopes of a quicker recovery in oil demand, while U.S. President-elect Joe Biden received the go-ahead to begin his leadership transition, Trend reports with reference to Reuters.
Brent crude futures rose 43 cents, or 0.9%, to $46.49 a barrel by 0522 GMT, while U.S. West Texas Intermediate crude added 45 cents, or 1.1%, to $43.51 a barrel.
Brent rose to a session high of $46.56 earlier on Tuesday, the highest level traded since early March before Saudi Arabia initiated a price war with Russia, which sent oil prices crashing. Both oil benchmarks settled up about 2% on Monday after gaining about 5% last week.
“Progress on developing and distributing a vaccine de-risks the path back to normal for oil markets,” said Stephen Innes, chief global markets strategist at financial services firm Axi.
“If mobility data is a measure of oil price sentiment, in the not too distant future, the vaccine will get people back on airplanes and cruise ships.”
AstraZeneca said on Monday its COVID-19 vaccine was 70% effective in pivotal trials and could be up to 90% effective, giving the world’s fight against the global pandemic a third new weapon that can be cheaper to make, easier to distribute and faster to scale-up than rivals.
This follows positive trial results from Pfizer/BioNTech and Moderna.
Also helping to ease uncertainty in financial markets, President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s incoming administration, giving his rival access to briefings and funding even as he vowed to persist with efforts to fight the election results.
U.S. crude oil inventories likely edged lower last week, while distillate stockpiles were seen decreasing for a 10th straight week, a preliminary Reuters poll showed on Monday, ahead of reports from the American Petroleum Institute and the Energy Information Administration (EIA).
Traders also focused on a week of technical meetings by OPEC and its allies to prepare the ground for next week’s ministerial gathering, which is set to discuss extending oil output curbs into next year due to weak demand amid a second wave of COVID-19.