Oil price finally gets the necessary support from vaccine news.
Earlier, AstraZeneca with its partner Oxford University announced the 90% efficacy of their vaccine. The drug could be stored without the need for complicated intervention and storage.
Along with this, Pfizer is already seeking regulatory approval for its inoculation. Industry spectators estimate that the shot might be ready for administration before Christmas.
The pharmaceutical firm, together with its partner BioNTech applied for FDA’s nod over the weekends.
Moderna Inc is reportedly trailing on the same path after garnering impressive data on the final stage of its trials.
With this successive good news, investors are growing optimistic about the looming recovery of the crude oil industry as soon as the state of affairs reverts to normal.
The Brent crude futures gained 0.22% and settled at $45.17. Weeks before, the European benchmark fell below the psychological critical threshold as stockpiles continued to rise.
Since Pfizer announced its much-awaited vaccine news two weeks ago, the commodity started to firm.
Based on market movements, the assets which experienced the most painful setbacks during the start of the pandemic became the biggest gainers of the news in return.
Consequently, the WTI Futures followed the upward trajectory after notching a conservative 0.05% increase.
In the latest commodity charts, the US benchmark is trading steadily above the $40 per barrel price point as it settles at $42.44 per barrel.
Such an increase translates to both contracts’ best performance in the last twelve weeks where oil prices remained at a steady high.
On the other hand, one of the biggest sources of downward pressure is the supply side of the shot.
According to analysts, it will take quite a while before the demand and supply settle on a level playing field.
OPEC Provides Support
The transport and distribution of the vaccine is, at the moment, still full of uncertainty. However, nothing at the moment can utterly cloud investors’ upbeat mood.
Adding support is the optimistic prospects for OPEC+, which should stick to the status quo.
According to market experts, the association’s members are likely to maintain their incumbent supply cuts to prevent the crude from reverting to their lowest.
Currently, the production curb stands at 2 million barrels per day. This is initially projected to last only until January of next year.
However, as supply continues to outnumber demand amid a growing number of mobility restrictions across the globe, this might be further extended.
