NEW YORK – – Oil rose about 4% on Tuesday to couch high not seen since March as a third promising coronavirus vaccine raised hope for fuel – demand recovery and U.S. President – elect Joseph Biden began his transition to the White House.
Brent crude settled at $47.86 a barrel, gaining $1.80, or 3.9%. U.S. West Texas Intermediate crude settled at $44.91 a barrel, rising $1.85, or 4.3%.
Both benchmarks ended at their highest close since March 6.
AstraZeneca on Monday said that its COVID-19 vaccine was 70% effective in trials and could be up 90% effective, giving the fight against the pandemic another potential vaccine after positive results from Pfizer-BioNTech and Moderna.
However, the vaccine will not be readily available for several months, meaning people will likely restrict travel and other activities through next year to try to slow the spread of the disease.
‘The petroleum complex is the vaccine trade’, said John Kilduff, partner at Again Capital in New York. ‘Until we can see the other side of the pandemic, the market is going to be mired in slack demand that is going to keep the overhang extensive.
The coronavirus pandemic, couple with the collapse of an OPEC-led output pact, sent prices crashing in March.
After the collapse of the output pact led to a brief Saudi Arabia-Russia price war, the Organization of the Petroleum Exporting Counties and allies agreed a new deal on record production cuts to support prices.
The group known as OPEC+ is expected to roll over those cuts into 2021 after meeting Nov.30 to Dec.1, following technical talks this week.
In addition, the Trump administration gave Democrat Joseph Biden access to resources that will enable him to take over in January after delaying for weeks despite Trump’s loss in the Nov.3 presidential election.
Biden’s early selection of top adviser helped buoy crude futures and equities, which oil often follows.
The first of this week’s U.S. supply reports is due at 4:30 p.m. EST (2130 GMT) from the American Petroleum Institute.
U.S. crude oil inventories are seen rising slightly last week, while distillate stockpiles likely declined for the 10th straight week, an extended Reuters poll sowed.