Oil prices improved due to positive Covid-19 vaccine news as the UK begins mass-inoculation to contain the pandemic that has affected global fuel demand.
The oil market also received support from the reports that the US may soon recommend the use of the Pfizer/BioNTech vaccine amid rising coronavirus cases. Canada also approved a vaccine this week.
Brent crude futures rose $0.22 to $49.08 a barrel while the US West Texas Intermediate (WTI) crude futures increased by $0.25 to $45.77 a barrel, reported Reuters.
The news agency quoted ANZ analysts as saying in a note: “A Covid-19 vaccine is a major turning point. Amongst its many benefits, will be that it could draw a line under the decline in oil market demand, which has suffered from government-imposed movement restrictions.
“However, there are some hurdles before the oil market can assume the worst is over…many governments are currently increasing restrictions to halt a resurgent spread while vaccine mass-production and distribution is worked out.”
The market was also buoyed by supply concerns following a terrorist attack on a small oilfield in northern Iraq.
The oil prices fell in earlier sessions after the US Energy Information Administration (EIA) said that crude inventories rose by 15.2 million barrels in the week to 4 December in the US.
EIA also reduced its global oil demand growth forecast for next year by 110,000bpd to 5.78Mbpd.