Oil prices jumped on Monday to a 12-week high, extending gains for the fourth straight day, on hopes about Covid-19 vaccination in the US, which would spur demand recovery in the world’s largest fuel consumer, in addition to strong odds for OPEC-Plus delaying the output increase scheduled early next year.
US crude rose 2.2% to the highest level since September 1st at $43.34, after opening at $42.42, and hit a session low of $42.32, and Brent crude rose 2.1% to the highest level since September 1st at $46.04 a barrel, after opening at $45.11, with a low of $44.92.
US crude gained 1.7% on Friday, and Brent crude futures rose about 2.1%, posting their third daily gain in a row.
Oil prices gained 5.5% during the past week, and posted the third straight weekly gain, on strong market sentiment following the positive news about Covid-19 vaccines.
A top official in the US government virus vaccine effort said on Sunday that health care advisors have recommended that the first Covid-19 vaccines can begin to be used within a day or two after the regulators’ approval next month.
The US Food and Drug Administration (FDA) will grant the approval in mid-December to distribute the vaccine produced by Pfizer and BionTech, which will be the largest vaccination campaign in the US history.
The Joint Ministerial Committee of OPEC-Plus met last week to review the global supply cut agreement and pledged to show flexibility in responding to the market needs next year.
This increased odds that the coalition will delay the next year’s planned output hike for at least 3 months in the upcoming official meeting on November 30 and December 1.
OPEC-Plus is currently implementing the second phase of the cut agreement, cutting about 7.7 million bpd until the end of December, and will be lowered to 5.7 million bpd in phase three, starting from January 2021 until April 2022.