Oil prices rise following hopes over Covid-19 vaccine

14 December 2020 (Last Updated December 14th, 2020 09:49)

Oil prices have increased following expectations that the rollout of Covid-19 vaccines would increase fuel demand across the globe.

Oil prices rise following hopes over Covid-19 vaccine
Brent crude futures rose $0.67 to $50.64 a barrel, Reuters reported. Credit: Kristina Kasputienė from Pixabay.

Oil prices have increased following expectations that the rollout of Covid-19 vaccines would increase fuel demand across the globe.

Meanwhile, an explosion of an oil tanker off Saudi Arabia’s port city of Jeddah shook the energy market.

Brent crude futures rose $0.67 to $50.64 a barrel while the US West Texas Intermediate (WTI) crude futures increased by $0.62 to $47.19 a barrel, reported Reuters.

The price rise also comes after shipping firm Hafnia said that an oil tanker was hit by an unidentified ‘external source’ while discharging at Jeddah.

Energy Aspects analyst Virendra Chauhan was quoted by the news agency as stating: “The market is assessing supply disruption from these incidents versus Iranian (supply) volumes coming back, so it’s unsurprising that prices are choppy.”

Meanwhile, the US started its vaccination programme against Covid-19. This created hopes that the coronavirus-related restrictions could soon end and increase the country’s fuel demand.

One more factor that buoyed financial markets on 14 December is the extension of the Brexit talks between the UK and the European Union.

CMC Markets chief markets strategist Michael McCarthy asked: “Having ‘bought the rumour’ of an effective vaccine, now that delivery is here will investors ‘sell the fact’?”

Major European nations continue to be in lockdown mode so as to limit the spread of the virus.

Germany intends to impose tighter lockdown measures from 16 December to fight against the virus.

Furthermore, two separate fires occurred at Qua Iboe crude oil export terminal in Nigeria and at Iran’s oil pipeline on 13 December. The two incidents are now under control.