Oil prices soared on Wednesday as developments of an effective COVID-19 vaccine bolstered hopes. According to the data, it appears that US crude oil stocks have dropped more than expected.
Brent crude futures rose $1.01, or 2.3% to $44.62 a barrel at 0740 GMT, while West Texas Intermediate (WTI) crude futures added 99 cents, or 2.4%, to $42.35 a barrel.
Both benchmarks gained nearly 3% on Tuesday.
Crude inventories fell 5.1 million barrels last week to around 482 million barrels, according to industry group data released Tuesday, compared to analysts’ expectations of a 913,000 barrel drop.
Both Brent and WTI oil prices rose more than 13% this week, as preliminary trial data showed that the experimental COVID-19 vaccine developed by Pfizer Inc and BioNTech was 90% effective.
Although oil prices are supported by positive news about vaccines, the overall fuel demand outlook remains uncertain due to reapplied coronavirus restrictions in Europe and the United States. Short-term demand expectations are weak. As long as there are international travel restrictions, demand will take considerable time to recover.
The restrictions slowed the pace of fuel demand recovery by negatively tolerating recovery in Asian economies, where consumption returned to nearly pre-COVID levels.