Bloomberg
Oil for weekly increase in Covid-19 vaccination optimism
(Bloomberg) – Oil faces a third weekly gain as positive developments in Covid-19 vaccines pave the way for a more sustained recovery in oil demand. The future in New York is up 4% this week as Pfizer Inc. and BioNTech SE plan to apply for emergency approval for their Covid vaccine later this Friday. Moderna Inc. has also released positive interim results from a final test, stating that it is about to receive emergency approval. Despite a strong week, trading prices barely changed on Friday as investors assessed the impact of a White House-federal dispute with reluctance to adopt emergency loan programs: “The oil market continues to keep up well with the optimism brought about by advances in Covid- 19 vaccines, ”said Harry Tchilinguirian, Head of Commodity Markets Strategy at BNP Paribas SA. “At the same time, we should soon receive the results from AstraZeneca and Oxford University. If this is similar to Pfizer and Moderna, it means that the lights at the end of the tunnel will be a little brighter and risk-weighted assets like oil can continue to rise. “Even with vaccines in sight, oil demand recovery faces obstacles as governments pressurize to tighten restrictions and curb the spread of the virus. Americans are told not to travel for Thanksgiving and European road use is once again depressed due to closures. As prices climb to the top of a range they have held for months, many of the biggest moves have been temporary – the price differential between futures contracts. On Friday, the closely watched spread between West Texas Intermediate crude oil contracts between December 2021 and 2022 is about to reverse. The Pizer and BioNTech vaccine could be the first to be approved for use, but it needs a thorough review first. Filing could allow their use from mid to late December, the companies said in a statement. However, it could be at least three weeks before a decision is made by the U.S. Food and Drug Administration. Uncertainty about an oil market recovery will be one of the challenges organizing the petroleum exporting countries and their allies when they meet in less than two weeks before the OPEC + meeting, which sees a possible extension of the current production cuts by three to six For months to come, a buying frenzy from Asian refiners is expected, whether or not to add crude oil to a still saturated market, worsening prospects amid rising production from countries like Libya. According to data from Ursa Space Systems, China’s crude oil inventories have declined in five of the last seven weeks. More articles like this can be found at bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2020 Bloomberg LP
