Oil prices rose on Monday, pushing Brent back above $50 a barrel, buoyed by hopes that a rollout of coronavirus vaccines will lift global fuel demand.
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Brent crude futures for February rose 38 cents, or 0.8 percent, to $50.35 a barrel by 1435 GMT, while US West Texas Intermediate crude futures for January were up 40 cents, or 0.9 percent, at $46.97 a barrel.
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Prices also extended gains amid supply jitters after a shipping firm said an oil tanker was hit in the Saudi port of Jeddah, which the energy ministry called a terrorist act.
“Traders have for years now been used to tensions flaring in the region and when that happens, oil markets tick up,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets.
Coronavirus: All EU nations to start vaccinations on same day
US expects to have immunized 100 mln against COVID-19 by end of March
Brent and WTI have rallied for six consecutive weeks, their longest stretch of gains since June.
The United States kicked off its vaccination campaign against COVID-19, lifting hopes that pandemic restrictions could end soon and lift demand in the world’s largest oil consumer.
“Brent crude is supported by both financial and physical flows. The dollar is declining, the Brent crude curve is in backwardation and vaccines are being rolled out,” said SEB chief commodity analyst Bjarne Schieldrop.
“We think that this rally has further to go.”
Major European countries continued in lockdown mode to curb the spread of COVID-19 which has reduced fuel demand. For example, Germany, the fourth largest economy in the world, plans to impose a stricter lockdown from Wednesday to battle the virus.
In the United States, energy firms last week added the most oil and natural gas rigs in a week since January as producers continued to return to the wellpad.
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- Official sources confirm terrorist attack on fuel transport ship in Jeddah: SPA
- Coronavirus: Canada to begin Pfizer-BioNTech COVID-19 vaccine roll-out
- Coronavirus vaccine is safe, should be taken by all: Saudi Arabia’s Health Ministry