Oil prices rose on Tuesday as investors focused on the rollout of COVID-19 vaccines, looking past tightening lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand.
Brent crude settled at $50.76 a barrel, rising 47 cents, or 0.9%. U.S. West Texas Intermediate (WTI) crude settled at $47.62 a barrel, gaining 1.3%, or 63 cents.
The United States began vaccinating people on Monday as the country’s COVID-19 death toll crossed the 300,000 mark. Britain and Canada have also begun to administer shots.
“The crude market continues to seize upon the future outlook of the post-pandemic period, which could be as soon as next summer,” said John Kilduff, partner at Again Capital in New York.
Crude oil throughput rose by 3.2% year-over-year in China in November，a record. That helped investor sentiment about coming increases in fuel demand, said Phil Flynn, senior analyst at Price Futures Group in Chicago. China has been one of the rare countries where oil demand has fully recovered from earlier this year.
“People would assume that the oil demand surge is right around the corner,” Flynn said.
Still, the International Energy Agency said on Tuesday any impact of vaccines on demand is still several months away, while OPEC said on Monday oil demand will rise more slowly than expected. [IEA/M] [OPEC/M]
Brent hit $51.06 on Dec. 10, highest since March, supported by vaccine approvals, even as the infection rate has surged in most regions worldwide.
London stepped up pandemic rules requiring bars and restaurants to close, Italy is considering more stringent steps over Christmas, and Germany is likely to be under lockdown until early 2021.
The latest snapshot of U.S. oil supplies showed crude oil stocks unexpectedly rose last week, according to the American Petroleum Institute, an industry group.
Crude inventories swelled by 2 million barrels in the week to Dec. 11 to about 495 million barrels, compared with analysts’ expectations in a Reuters poll for a draw of 1.9 million barrels, API said.