Oil prices jumped more than 4 percent on Monday, recouping the previous session's losses after Moderna Inc said its experimental vaccine was 94.5 percent effective in preventing COVID-19.
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Brent crude futures for January were up $1.79, or 4.2 percent, to $44.57 a barrel by 1420 GMT, while US West Texas Intermediate crude for December was up $1.84, or 4.6 percent, at $41.97.
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“Vaccine euphoria has already been priced in heavily since last week, but a second remedy to COVID-19 shows that a large-scale vaccination program, with sufficient amounts for the global population, is somewhat closer now,” said Rystad Energy analyst Louise Dickson.
The announcement by Moderna comes after Pfizer Inc reported last week that its vaccine was more than 90 percent effective, raising hopes that pandemic-driven damage to the global economy could be reduced.
Prices were also buoyed by data showing a rebound in China and Japan, with figures showing that Chinese refineries processed record daily levels of crude in October.
Both WTI and Brent gained more than 8 percent last week on hopes of a vaccine and expectation that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, would maintain lower output next year to support prices.
The group, known as OPEC+, has been cutting production by about 7.7 million barrels a day (bpd), with compliance seen at 96 percent in October, and had planned to increase output by 2 million bpd from January.
OPEC+ is set to hold a ministerial committee meeting on Tuesday that could recommend changes to production quotas when all the ministers meet on November 30 and December 1.
“There is no denying that the oil market is fully in the hands of OPEC+,” said SEB chief commodity analyst Bjarne Schieldrop. “The organization is the only reason why oil prices today are not $20 a barrel. As such, their upcoming meeting on November 30-December 1 is no less hugely important.”