Oil price rally builds steam as coronavirus vaccine rollouts begin
Oil rose around 1% on Friday, extending a sharp rally overnight that saw Brent rise above $50 for the first time since March, as coronavirus vaccination rollouts kept hopes alive that demand for crude would build up next year.
Brent was up 45 cents or 0.9% at $50.70 a barrel by 0121 GMT, after gaining nearly 3% on Thursday. U.S. oil was up 50 cents, or 1%, at $47.28 a barrel, having also risen almost 3% in the previous session.
That leaves prices set for a sixth consecutive week of gains as promising vaccine trials helped quell gloom over record increases in the number of new infections and deaths around the world in the coronavirus pandemic.
Britain began inoculations this week and the United States could start vaccinations as early as the coming weekend, while Canada on Wednesday approved its first vaccine with initial shots due from next week.
“The recovery from the pandemic will accelerate once a vaccine is widely available, further supported by ongoing fiscal and monetary stimulus from governments around the world,” ANZ Research said in a note.
Outside advisers for the U.S. Food and Drug Administration have voted to endorse emergency use of Pfizer’s vaccine, paving the way for the agency to authorise its use to inoculate a nation that has lost more than 285,000 lives to COVID-19.
“The broad market rally is expected to continue next year, with commodities set for a positive year amid an improving economic backdrop,” ANZ said.
A big jump in U.S. crude stockpiles served as a reminder that there is still plenty of supply available, but was all but ignored as bulls ran through the market this week.
They were encouraged by signs that Asian demand is strong, with India’s biggest refiner saying that it was operating at 100% capacity of all its nine units for the first time since early this year.