By Adedapo Adesanya
Oil prices returned to the bullish zone on Wednesday as the United Kingdom became the first country in the world to approve the Pfizer/BioNTech coronavirus vaccine, paving the way for mass vaccination.
This pushed the price of the Brent crude higher by 58 cents or 1.18 per cent to $47.83 per barrel and jerked the West Texas Intermediate (WTI) crude futures up by 0.94 per cent or 42 cents to $44.97 per barrel.
Yesterday, Britain’s medicines regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), said the jab, which offers up to 95 per cent protection against COVID-19 illness, is safe to be rolled out.
The first doses are already on their way to the UK, with 800,000 due in the coming days, Pfizer said.
The Pfizer/BioNTech jab is the fastest vaccine to go from concept to reality, taking only 10 months to follow the same steps that normally span 10 years.
The UK has already ordered 40 million doses of the jab, which is enough to vaccinate 20 million people and the possibility of this easing demand worries lifted the mood of the market.
Equally supporting the market at the midweek session was indications that the Organisation of the Petroleum Exporting Countries (OPEC) and other non-member oil producers known as OPEC+ are engaging in a diplomatic push to agree on output levels before a key meeting on Thursday.
The recent spike in coronavirus cases has been touted as a likely catalyst that will prompt the OPEC+ alliance to roll over the current 7.7 million barrels per day production cuts into 2021, instead of easing them by 2 million barrels per day from January.
Most OPEC nations at a virtual meeting on Monday favoured deferring the expected supply increase due to take effect in January by three months but the United Arab Emirates (UAE) pushed back, insisting on stringent conditions.
The UAE said that even though it could support a rollover, it would struggle to continue with the same deep output reductions into 2021.
The market is banking on an extension of the current OPEC+ cuts of three months through the end of the first quarter of 2021, as this will likely help keep prices up and oversupply in check.
Another development that helped the market was crude stockpiles in the United States beating expectations. It was noted that crude inventories fell by 679,000 barrels in the week to November 27, according to data from the Energy Information Administration (EIA) on Wednesday, defying the build the American Petroleum Institute (EIA) reported on Tuesday.
US oil production rose 100,000 barrels per day last week to its highest level since May, the EIA data showed.
Dipo Olowookere