Oil prices have risen as the Covid-19 vaccination programmes increased hopes that fuel demand would be revived by next year.
Brent crude futures rose $0.30 to $50.55 a barrel while the US West Texas Intermediate (WTI) crude futures increased by $0.31 to $47.09 a barrel, reported Reuters.
The UK already began a Covid-19 vaccination programme this week and the US could start vaccinations as early as this weekend.
Meanwhile, Canada approved its first vaccine on 9 December with initial shots due to start from next week.
OANDA senior market analyst Edward Moya was quoted by Reuters as saying: “Crude prices are surging in anticipation of the FDA’s potential approval of Pfizer’s vaccine, as Asia’s economic recovery is making Chinese and Indian refiners acquire more oil.”
A panel of outside advisers for the US Food and Drug Administration (FDA) has voted to endorse emergency use of Pfizer’s Covid-19 vaccine.
This enabled the US FDA to authorise the vaccine’s use for a nation that has lost more than 285,000 lives to the virus.
Furthermore, a big rise in US crude stocks ‘served as a reminder’ that there is much more supply available. However, the jump was ignored ‘as bulls ran through the market’ this week.
This was encouraged by signs that leading refiner Indian Oil (IOC) saying that it was operating at full capacity at all its nine units for the first time since February.
Moya added: “It seems the impending lockdowns across the US and the potential hit to crude demand is being compensated by improving trends across Brazil, the UK, and most of Asia.”