By Adedapo Adesanya
Oil prices pointed north on Monday as news of another potential vaccine breakthrough increased investors’ confidence in the market.
The value of the commodity shot up yesterday after Moderna said that the Phase 3 study of its vaccine candidate, which had more than 30,000 participants enrolled in the United States, met statistical criteria with a vaccine efficacy of 94.5 per cent.
This information pushed the price of the Brent crude higher by $1.06 or 2.48 per cent to sell at $43.84 per barrel, while the United States’ West Texas Intermediate (WTI) crude went up by $1.23 or 3.09 per cent to $41.39 per barrel.
Moderna said it plans to file for an Emergency Use Authorization (EUA) with the US Food and Drug Administration (FDA) in the coming weeks and submit applications for authorisations to global regulatory agencies.
Moderna’s vaccine news comes a week after Pfizer and BioNTech announced a 90 per cent efficacy of their COVID-19 vaccine candidate, sending oil prices soaring almost 10 per cent last Monday.
A vaccine for many people around the world will unlikely be available until late into 2021, but the oil market received the news with open arms.
Another bullish news that helped oil prices on Monday was the new data showing a rebound in the world’s second and third largest economies, China and Japan respectively.
Data indicated that China, the world’s largest importer of crude oil, throughput rose 2.6 per cent in October from a year earlier to its highest-ever level as fuel demand firmed on strong holiday travel.
The country processed 59.82 million tonnes of crude oil last month, equivalent to 14.09 million barrels per day, according to data from the country’s National Bureau of Statistics (NBS) on Monday compared with 13.96 million barrels per day in September, topping the previous daily record set in June at 14.08 million barrels per day.
Market analysts also noted that plans that the Organisation of the Petroleum Exporting Countries, OPEC+ would maintain lower output next year supported prices.
OPEC and its allies, including Russia, have been cutting production by about 7.7 million barrels a day with a compliance rate seen at 101 per cent in October and had planned to increase output by 2 million barrels per day from January 2021.
OPEC+ is set to hold a ministerial committee meeting on Tuesday, November 17 (today) that could recommend changes to production quotas when all the ministers meet on November 30 and December 1.
The group faces a challenge, however, in that Libya is now producing more than 1.2 barrels per day and new restrictions in the United States and Europe could dampen the global demand recovery.
Modupe Gbadeyanka