Oil keeps inching up on hopes a coronavirus vaccine rollout will lift fuel demand

Singapore — Oil prices rose on Monday, pushing Brent back above $50 a barrel, buoyed by hopes that a rollout of coronavirus vaccines will lift global fuel demand, while an extension of Brexit talks eased jitters on that front for now.

Brent crude futures for February rose 8c, or 0.2%, to $50.05 a barrel by 3.37am, while US West Texas Intermediate crude futures for January were up 4c, or 0.1%, at $46.61 a barrel.

Oil prices have rallied for six consecutive weeks, their longest stretch of gains since June.

The US kicked off its vaccination campaign against Covid-19, buoying hopes that pandemic restrictions could end soon and lift demand at the world’s largest oil consumer.

An extension of Brexit talks among European powers also buoyed financial markets on Monday.

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 countries continued in lockdown mode to curb the spread of Covid19 which has reduced fuel demand. For example, Germany, the world’s fourth-largest economy, plans to impose stricter lockdown from Wednesday to battle the virus.

Investors are looking ahead to two meetings between Opec and its allies including Russia, a grouping known as Opec+.

The Opec+ joint ministerial monitoring committee (JMMC) that monitors compliance among members will meet on December 16, while Opec+ will meet on January 4 to study the market after their last decision to limit production rises to 500,000 barrels per day starting next year.

In the US, energy firms last week added the most oil and natural gas rigs in a week since January as producers continued to return to the well pad.

Two separate fires occurred at Nigeria’s Qua Iboe crude oil export terminal and at an oil pipeline in Iran on Sunday but the incidents have mostly been contained.

Reuters