Brent oil price jumped significantly on Tuesday hitting its highest level since March over news of a third effective COVID-19 vaccine which boosted hopes for a quicker oil demand recovery.
International benchmark Brent crude was trading at $46.59 per barrel at 0668 GMT on Monday with a 1.19% increase after closing Friday at $46.04 a barrel.
American benchmark West Texas Intermediate (WTI) was at $43.66 per barrel at the same time with a 1.39% increase after ending the previous session at $43.06 a barrel.
With optimism over vaccine developments which signal a global economic and oil demand rebound soon, Brent oil price hit its eight-month high.
AstraZeneca announced on Monday that its coronavirus vaccine has 70% efficacy against the novel coronavirus. The British pharma giant’s positive news came after the US drug maker Pfizer and its German partner BioNTech announced earlier this month that their vaccine candidate is 95% efficient against COVID-19, with 94% effectiveness in those aged 65 and over. Another US biotech firm Moderna also announced last week that its coronavirus vaccine candidate is 94.5% effective.
The World Health Organization (WHO) chief Tedros Ghebreyesus's upbeat assessment on vaccine development further supported the bullish oil prices. During a twice-weekly press webinar in Geneva on the novel coronavirus, Ghebreyesus said “the light at the end of the COVID-19 tunnel is growing brighter” thanks to the current vaccine developments.
Political risk and oil analyst Jose Chalhoub said although the oil prices started the week upward significantly upon the positive vaccine news, the supply and demand issue remains on the table with lockdowns everywhere as the virus shows no signs of slowing down in most parts of the world.
On the supply side, Chalhoub said investors are closely watching “the alleged desire of United Arab Emirates (UAE) to leave the OPEC and Libya’s amazingly ramping up its production.”
By Sibel Morrow