Oil prices extended gains on Friday when Brent reached $50 a barrel for the first time since March on optimism that global oil demand will rebound with progress on coronavirus vaccines.
International benchmark Brent crude was trading at $50.31 per barrel at 0614 GMT for a 0.12% increase after closing Thursday at $50.25 a barrel.
American benchmark West Texas Intermediate (WTI) was at $46.90 per barrel at the same time for a 0.26% rise after ending the previous session at $46.78 a barrel.
The upturn in oil prices was mainly caused by vaccine euphoria, which could enable a return to economic normality next year.
After the UK kicked off a mass vaccination program on Tuesday, Canada also announced on Thursday that the first shots would start next week. The US, where the number of cases exceeds 15.6 million, is also expected to start the first shots at the weekend, as the US Food and Drug Administration is about to give its approval.
According to data from Johns Hopkins University on Friday, the number of cases worldwide has now reached over 69.5 million. The US, the world's largest oil-consuming country, still tops the number of cases above 15.6 million, while cases in India now total over 9.7 million, and Brazil follows with over 6.7 million cases.
However, a surprising massive build in US crude inventories limited upward price pressure, signaling that demand in the country is still weak.
“The coronavirus is teaching us that public health is a precondition for economic health,” Jim Krane, a Houston-based energy research fellow at Rice University’s Baker Institute, told Anadolu Agency.
Pointing to the direct correlation between fuel demand and illness, Krane said “when cases are high – like now – demand falls off and inventories build.”
“When people are sick – or worried about getting sick – they don’t travel. They don’t socialize. They avoid cars, trains, planes, buses and cruise ships. They stay away from offices and restaurants,” he said.
According to data released by the country's Energy Information Administration (EIA) on Thursday, US commercial crude oil inventories rose by 15.2 million barrels, or 3.1%, to 503.2 million barrels relative to the market expectation of a fall of 1.5 million barrels.
By Sibel Morrow