By Adedapo Adesanya
Brent crude rose to its highest level since March as a third promising coronavirus vaccine raised hope for fuel demand recovery and pushed the value higher on Tuesday by $1.76 or 3.82 per cent to sell at $47.82 per barrel.
The possibility of having a vaccine next year also boosted the price of the United States’ West Texas Intermediate (WTI) crude yesterday by $1.75 or 4.05 per cent to trade at $44.81 per barrel.
The coronavirus pandemic, coupled with the collapse of a supply output cut deal, sent prices crashing in March. The pact led by the leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia and its allies led by Russia disagreed on how to manage oil supply in the pandemic and started a brief oil price war that contributed to the price collapse together with the demand destruction.
Now, the market has received a fresh boost as the University of Oxford and AstraZeneca said that interim trial data from their Phase III trials show their candidate vaccine is effective at preventing COVID-19 and offers a high level of protection.
This was the third positive vaccine news for the past three weeks, after the announcements from Pfizer and Moderna, which were around 95 per cent effective.
The potential of having massive rollout of vaccines pushed oil prices further up as the market hopes that global oil demand recovers sooner than expected.
Since the first announcement from Pfizer, the energy sector has been bullish considering it has taken one of its hardest hits in history.
Amid this, OPEC+ is expected to roll over current cut levels into 2021 when it meets November 30 to December 1, following technical talks this week.
Also contributing to the bullish outcome on Tuesday was the news that the President Donald Trump administration has given Democrat and President-elect, Mr Joseph Biden access to resources that will enable him to take over in January after weeks of delay.
President Trump had lost to Mr Biden in the November 3 election but the Biden team had been denied access to government information and agencies by the Trump administration.
The President-elect and his vice, Kamala Harris will also be receiving classified intelligence briefings as white house officials will start to cooperate.
The oil market also awaits the US inventories reports on Wednesday from the American Petroleum Institute (API) which will be then be followed by the official one from the Energy Information Administration (EIA) but so far, US crude oil inventories are expected to rise slightly in the past week.
Dipo Olowookere