Oil hit its highest since March on Tuesday, rising toward $47 a barrel, as a third promising coronavirus vaccine spurred demand recovery hopes and US President-elect Joe Biden received the go-ahead to begin his transition.
This is Brent’s highest since the collapse of an earlier OPEC-led output pact, just as demand was starting to crater in March due to the developing pandemic, sent prices crashing.
Also supporting oil and wider financial markets, US President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s administration.
“In the short-term, this is good for markets in general as well as for the oil market,” said Bjarne Schieldrop of SEB.
Expectations that US crude inventories edged lower last week also added support. The first of this week’s US supply reports is due at 2130 GMT from the American Petroleum Institute.
After the previous output pact collapsed leading to a brief Saudi Arabia-Russia price war, OPEC and allies agreed to record high output cuts to support prices.
OPEC+, as the group is known, is expected to roll over current cuts into 2021 at meetings on November 30-December 1, following technical talks this week.