Crude Oil was steady in New York ahead of the rollout of the first Covid-19 vaccine in the U.S., raisingoptimism of a recovery in fuel demand in the world’s biggest crude consumer.
Futures traded near $47 a barrel after losing 0.5% on Friday. First deliveries of the Pfizer Inc.-BioNTech SE vaccine will be made Monday after the drug gained emergencyauthorization last week, with PresidentTrump and other officials being offered the shot as part of a plan to ensure continuity of government.
The market will also be looking for progress on new stimulus in the U.S., with a bipartisan group of lawmakers poised to unveil a $908 billion pandemic relief bill, although there’s no guarantee it will passCongress. Brexittalks were extended, meanwhile, raising hopes of a deal.
Crude oil in New York has advanced about 30% since the end of October with global benchmark Brent rising to a nine-month high and topping $50 a barrel last week after vaccinebreakthroughs and as OPEC+ reached a compromise deal on output. Iran, meanwhile, plans to almost double production in the next year in anticipation of a loosening of sanctions after Joe Biden becomes president.
A further acceleration in vaccine developments or breakthrough in stimulus talks may help Brent end 2020 at $55 a barrel, said Howie Lee, an economist at Oversea-Chinese Banking Corp. Uncertainty over OPEC supply, however, could cap oil’s advance for now, he added.
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.
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 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 globaldemand 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.