Oil prices soared on Tuesday, with positive news about the COVID-19 vaccine, which provides support to the market. Despite this, concerns remain about short-term fuel demand in Europe and the United States, driven by renewed lockdowns.
West Texas Intermediate (WTI) crude CLc1 futures edged up 16 cents, or 0.4%, to $40.45 a barrel by 0805 GMT, while Brent crude LCOc1 futures rose 9 cents, or 0.2%, to $42.49.
Despite total practices are likely to be months later and subject to regulatory approvals, agreeded satement of manufacturers (Pfizer PFE.N and BioNTech 22UAy.F) mentioned that an experimental COVID-19 treatment was more than 90% effective compared to initial trial results. Both benchmarks rose 8% on Monday,showing its biggest daily gains in over five months.
It is said that the lockdowns in Europe could result in loss of oil demand by another 1 million barrels a day by the end of this year.
Application of the vaccine will indisputably change the rules of the game about oil demand and consumption, as it will increase human mobility in every sense. However, time is needed for all of these, and the current supply and demand imbalances must be eliminated before prices increase at the desired rate.
It is an inevitable reality that news about the vaccine’s development faster than predictions does not reduce the risk of entering some form of isolation this fall and winter.
Official US oil inventory figures will be released weekly, by the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday, letting us to view and comment on the state of regional stocks and demand.
On average, US crude oil stocks are estimated to have fallen 1.3 million barrels in the week to November 6, according to a survey.
The volatility in oil prices is being affected by the Saudi Arabian statement that OPEC and its allies said they could change the supply cut agreement if demand drops before the vaccine.