Oil prices steady at nine-month high on vaccine confidence

London — Oil steadied near a nine-month high on Friday on track for a seventh weekly gain in a row as investors focused on the rollout of Covid-19 vaccines and looked past rising case numbers and tighter lockdowns in Europe.

Pfizer has applied for approval in Japan for its vaccine, which is being used in the UK and the US. The US Food and Drug Administration (FDA) is also working towards approving Moderna’s shot.

Brent crude was down 12c, or 0.2%, at $51.38 at 9.25am GMT, near the nine-month high of $51.90 hit on Thursday.

US West Texas Intermediate (WTI) crude, which also reached its highest since March on Thursday, added 6c or 0.1%, to reach $48.42.

“Bullish momentum is taking a breather,” said Stephen Brennock of oil broker PVM. “Looking ahead, oil prices should continue to find support from the prospect of a Covid-19 relief bill and accelerating vaccine rollouts.”

US lawmakers are trying to agree a coronavirus relief package but a new potential roadblock emerged as some Senate Republicans insisted on language ensuring that expiring US Federal Reserve lending programmes cannot be revived.

Oil gained support this week from weekly US supply data showing crude inventories fell by 3.1-million barrels, more than the 1.9-million drop analysts had expected.

Oil cartel Opec and allies, including Russia (Opec+), are supporting market prices by slowing the pace of a planned increase in supplies in 2021.

Opec+ plans to add 500,000 barrels per day (bpd) of supply in January, in a first step towards a 2-million bpd target, and the group will meet in early January to decide on next steps. 

Reuters