By Adedapo Adesanya
Oil prices opened the week on Monday, December 14, in the positive territory amid hopes that a rollout of coronavirus vaccines will lift global fuel demand.
During the trading session, the Brent crude gained 36 cents or 0.72 per cent to sell at $50.33 per barrel while the West Texas Intermediate (WTI) rose 42 cents or 0.9 per cent to trade at $46.99 per barrel.
The bullish outcome happened as the United States kicked off its vaccination campaign against COVID-19, lifting hopes that pandemic restrictions could end soon and lift demand in the world’s largest oil consumer.
The rollout of the first COVID-19 vaccine in the US began on Monday morning marked a major turning point in the country’s battle against surging case numbers as the first doses of the Pfizer medication was administered to health care workers and nursing home staffers.
The rollout comes less than a week after the US Food and Drug Administration (FDA) authorized the vaccine for emergency use for Americans over 16. The order from the FDA led to the pharmaceutical company shipping 2.9 million doses to 636 sites across the country.
Crude has been doing well for the last six weeks as investors banked heavy on hopes of a vaccine-induced economic growth as well as improvement in energy demand.
It also got a boost early in the session following an explosion at the Saudi port of Jeddah. Saudi Arabia said a terrorist attack was behind the incident, but that it didn’t disrupt oil or fuel supplies.
Despite this, some factors still continue to impact the commodity, one of which is the heavy virus spread and it’s effect on reopening plans especially in some places in the US and the United Kingdom.
According to reports, London is increasing pandemic restrictions this week amid warnings of a new variant of the disease, while New York City said residents should be prepared for a full lockdown. Germany, Europe’s largest economy, plans to impose a stricter lockdown from Wednesday to battle the virus.
Also adding to the pressure, the Organization of Petroleum Exporting Countries (OPEC) on Monday reduced projections for global fuel consumption in the first quarter of 2021 by 1 million barrels a day.
The group has steadily lowered its 2021 demand growth forecast in recent months. In the latest round, it cut its forecast for world oil-demand growth to 5.9 million barrels a day, down 350,000 barrels a day from its previous projection.
In its monthly report, OPEC pegged 2020 oil demand at 89.99 million barrels a day, a decline of 9.77 million barrels a day from 2019 and slightly below its previous estimate.
This is happening as rising supply continue to weigh on the market. According to the National Oil Company (NOC), Libyan oil production stood at 1.28 million barrels per day on Monday, up from 1.25 million barrels per day in late November.
Modupe Gbadeyanka