By Adedapo Adesanya
The bullish momentum at the oil market lately was sustained on Thursday and this was buoyed by the Brexit trade deal between the European Union and the United Kingdom.
On the Christmas eve, the price of the Brent crude rose by 9 cents or 0.18 per cent to sell at $51.29 per barrel, while the West Texas Intermediate (WTI) appreciated by 11 cents or 0.23 per cent to trade at $48.23 per barrel.
It was observed that the news of the Brexit trade agreement was received well by the market because there had been fears that both parties will not agree to their respective terms.
The deal signed yesterday ended the months of disagreements over fishing rights and future business rules.
The UK is set to exit EU trading rules next Thursday – a year after officially leaving the 27-nation bloc. The country voted to leave the EU in 2016 and actually left on January 31, 2020, but leaders had until the end of 2020 to work out a trade deal.
This means big changes for business, with the UK and EU forming two separate markets and the end of free movement.
Prices remained in the positive position as crude inventories in the US fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration (EIA) said on Wednesday.
This gave the market an impression of better development in terms of development.
On the pandemic front, at least four drugmakers expect their COVID-19 vaccines will be effective against the new fast-spreading variant of the virus that is raging in Britain and are performing tests that should provide confirmation in a few weeks.
Recent news of a new strain of COVID-19 being referred to as SARS-CoV-2 VUI 202012/01 spurred many countries to place travel bans in place and this affected demand outlook.
The latest vaccine to be developed was doubted over transparency. Chinese pharmaceutical firm Sinovac Biotech Limited said its vaccine is more than 50 per cent effective, well below the results achieved by Moderna and Pfizer, but researchers delayed releasing more information on the trials.
There’s also a risk that the recent price rally might lead to production coming back from producers that are not privy to the Organisation of the Petroleum Exporting Countries (OPEC) agreement, which sees them reduce outputs.
OPEC and its allies are set to meet on January 4, to determine production levels for the following month just as the market intends to increase production targets in the new year.
Dipo Olowookere