Oil rose on today, extending a sharp rally overnight that saw Brent rise above $50 for the first time since March, as coronavirus vaccination rollouts kept hopes alive that demand for crude would build up next year.
Brent was up 11 cents or 0.2% at $50.36 a barrel by 0427 GMT, after gaining nearly 3% on Thursday. U.S. oil was up 14 cents, or 0.3%, at $46.92 a barrel, having also risen almost 3% in the previous session.
That leaves prices set for a sixth consecutive week of gains as promising vaccine trials helped quell gloom over record increases in the number of new infections and deaths around the world in the coronavirus pandemic.
Britain began inoculations this week and the United States could start vaccinations as early as the coming weekend, while Canada on Wednesday approved its first vaccine with initial shots due from next week.
Edward Moya, senior market analyst at OANDA, said “Crude prices are surging in anticipation of the FDA’s potential approval of Pfizer’s vaccine, as Asia’s economic recovery is making Chinese and Indian refiners acquire more oil”.
Outside advisers for the U.S. Food and Drug Administration have voted to endorse emergency use of Pfizer (NYSE:PFE)’s vaccine, paving the way for the agency to authorise its use to inoculate a nation that has lost more than 285,000 lives to COVID-19.
A big jump in U.S. crude stockpiles served as a reminder that there is still plenty of supply available, but was all but ignored as bulls ran through the market this week.
They were encouraged by signs that Asian demand is strong, with India’s biggest refiner saying that it was operating at 100% capacity of all its nine units for the first time since early this year.
“It seems the impending lockdowns across the U.S. and the potential hit to crude demand is being compensated by improving trends across Brazil, the UK, and most of Asia,” said Moya.