Oil prices rose on Monday on positive sentiment driven by vaccine news and hopes for an extension of the OPEC+ production cuts through 2021.
International benchmark Brent crude was trading at $45.47 per barrel at 0668 GMT on Monday with a 1.13% increase after closing Friday at $44.96 a barrel.
American benchmark West Texas Intermediate (WTI) was at $42.74 per barrel at the same time with a 0.75% increase after ending the previous session at $42.42 a barrel.
Although the renewed lockdowns and restrictions to mitigate the spread of the coronavirus are still curbing oil demand, oil prices gained over the positive vaccine news and Brent oil traded over $45 a barrel on Friday for the second time in November.
The price hike came after US drug maker Pfizer and its German partner BioNTech submitted emergency use authorization request to the US Food and Drug Administration (FDA) for COVID-19 vaccine.
The companies said they also initiated rolling submissions across the globe including in Australia, Canada, Europe, Japan and the UK, and plan to submit applications immediately to other regulatory agencies around the world.
Based on current projections, the companies said they expect to produce globally up to 50 million doses in 2020 and up to 1.3 billion doses by the end of 2021 while they said the vaccine will be ready to be distributed “within hours” after authorization.
Since last week’s meeting of the Joint Ministerial Monitoring Committee (JMMC) held by the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing nations instilled hopes for a possible extension of the much-needed production cut deal, investors are now waiting for the outcome of the upcoming OPEC+ meetings on Nov. 30 and Dec. 1 as the world has been struggling with weak oil demand and a supply glut caused by the coronavirus pandemic.
The OPEC+ group, which has curbed output since January 2017 to support prices, is now reducing production by 7.7 million barrels per day (b/d), down from cuts totaling 9.7 million b/d imposed from May 1 to Aug. 1.
By Sibel Morrow