The covid-19 vaccine launch around the world keeps its push on oil prices, as investors focus on the recovery potential, rather than in the recovery warns of the industry. Oil demand is hoped to recover after the vaccine allows ease in lockdowns.
The U.S. started its vaccination program on Monday, after the Food and Drug Administration approved its emergency use. On Tuesday, its rollout extended to healthcare workers, as the Moderna vaccine is hoped to be approved fully this very week.
While the European Medicines Agency advanced its decision day for Pfizer’s model for December 21, instead of 29, under pressure from Germany. Saudi Arabia also started registering citizens and foreign residents for vaccination, state news agency reported this Tuesday.
Along with vaccines launch were investors’ hopes for recovery and kept oil prices in a rally, with six-weeks-in a-row gains. Brent crude peaked at $50,59 a barrel, and West Texas Intermediate at $47,42 with 30 and 43 cents gains, respectively.
“The crude market continues to seize upon the future outlook of the post-pandemic period, which could be as soon as next summer… and a lot of us in the market sense the demand is lurking,” said John Kilduff, partner at Again Capital, quoted by Reuters.
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Nevertheless, the industry keeps warning about a slower-than-expected recovery. The International Energy Agency said the vaccine recover may start in several months. On Monday, the Organization of Petroleum Exporting Countries (OPEC) said oil demand would rise slower than expected.
For Tamas Varga, oil broker at PVM, there’s a growing agreement between forecasting agencies that global oil demand won’t really recover until 2021’s second half. This week, a new variation of the Sars-Cov-2 virus was detected on England, which was confirmed by the World Health Organization.
London tightened its rules and ruled the closure of bars and restaurants; Germany also confirmed a new lockdown period until early 2021. Around the world, Covid-19 deaths have surpassed 1,6 million. The U.S. confirmed 300,000 death related to the virus.
As for oil supplies, they are expected to have risen in gasoline and crude inventory stockpiles. This may also be a factor for oil prices in days to come.