Oil Climbs Toward $47 on U.S. Vaccine Rollout, Tanker Explosion

(Bloomberg) — Oil advanced toward $47 a barrel before the rollout of the first Covid-19 vaccine in the U.S. and as news of another tanker explosion in the Middle East raised concerns over the region’s stability.

Futures rose 0.6% in New York after losing 0.5% on Friday. First deliveries of the Pfizer Inc.-BioNTech SE vaccine will be made Monday after the drug gained emergency authorization last week, with President Donald Trump and other officials offered the shot as part of a plan to ensure continuity of government.

A ship was hit by an explosion near the Saudi Arabian port city of Jeddah on Sunday, according to the United Kingdom Marine Trade Operations. The incident highlights the potential for supply to be disrupted in the region and comes three weeks after an oil tanker was damaged in a possible attack at the Saudi terminal of Shuqaiq.



chart: Oil has climbed amid vaccine breakthroughs


© Bloomberg
Oil has climbed amid vaccine breakthroughs

Oil in New York has advanced about 30% since the end of October amid vaccine breakthroughs and an OPEC+ compromise deal on output, with global benchmark Brent topping $50 a barrel for the first time in nine months last week. Iran, meanwhile, plans to almost double production in the next year in anticipation of a loosening of sanctions after Joe Biden becomes president.

Loading...

Load Error

“The rollout of the vaccine is going to have a positive effect on road fuel and eventually jet fuel demand,” said Stephen Innes, chief global strategist at Axi. “So much of the optimism in the price right now, I think, is warranted.”

Asian stocks rose and the dollar weakened, with the market also looking for progress on new stimulus in the U.S. A bipartisan group of lawmakers are set to unveil a $908 billion pandemic relief bill, although there’s no guarantee it will pass. Brexit talks were extended, meanwhile, raising hopes of a deal.

Prices
West Texas Intermediate for January delivery rose 30 cents to $46.87 a barrel on the New York Mercantile Exchange at 1:09 p.m. Singapore time.Futures eked out a 0.7% gain last week.Brent for February settlement gained 0.6% to $50.29 on the ICE Futures Europe exchange after losing 0.6% in the previous session.Crude futures were steady at 301.9 yuan a barrel on the Shanghai International Energy Exchange after climbing 6.7% on Friday.

Brent’s prompt timespread was 7 cents a barrel in backwardation, a bullish market structure where near-dated contracts are more expensive than later dated ones. That compares with a 1 cent contango a week earlier.

See also: Iran Sends Ship to Load Venezuela Oil in Defiance of Sanctions

All 50 U.S. states are expected to have the vaccine by Wednesday, with 2.9 million doses delivered in the first shipment. In general, the people to get the shot first will be health-care workers and vulnerable residents of care homes.

While parts of Asia have rebounded strongly from the virus-led crash and there are signs global demand is picking up after a November trough, the outbreak is continuing to dent consumption in some nations. South Korea is considering stricter social-distancing measures and Germany will enter a hard lockdown from Wednesday, which will last until at least Jan. 10.

Other oil-market news:
Royal Dutch Shell Plc has promoted Stacie Pitts, Carolyn Comer and Alice Acunato lead three of the five biggest trading businesses in the company.Equinor ASA plans to more than double its oil production in Russia after buying a stake in a Rosneft PJSC project in East Siberia.

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

Continue Reading

Source Article