Oil gains more than 2% as vaccine hopes outweigh lockdown impact
Oil prices rose on Tuesday as hopes that a COVID-19 vaccine could be on the horizon outweighed the expected negative impact on fuel demand of new lockdowns to curb the virus.
Brent crude futures rose 53 cents, or 1.3%, to $42.93, while U.S. West Texas Intermediate (WTI) crude futures settled up $1.07 cents, or 2.7%, to $41.36.
“A viable vaccine is unequivocally game-changing for oil - a market where half of demand comes from moving people and things around,” JP Morgan said in a note.
“But as we have written previously, oil is a spot asset that must first clear current supply and demand imbalances before one-to-two-year out prices can rise.”
Prices were also boosted by comments from Saudi Arabia’s energy minister, who said on Monday the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, could tweak their supply cut pact if demand slumps before the vaccine is available.
Reference: CNBC
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