Crude oil prices rallied impressively higher. Oil bulls are roaring hard on reports showing multiple COVID-19 vaccine makers delivered positive outcomes on their progress.
- At the time of filing this report, Brent oil futures broke above $44/barrel.
- West Texas Intermediate futures gained 0.60% to trade at $41.59/barrel.
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Moderna Inc. recently disclosed its candidate mRNA-1273 has considerably greater efficacy and better storage conditions than its arch American rivals, Pfizer Inc. and BioNTech product, BNT162b, raising hopes that the days of COVID-19 pandemic are now numbered.
Such macro is triggering oil bulls to break their old resistance level with oil traders pinning their hopes on a rise in energy demand for 2021.
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What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, also attributed the gains seen lately to macros coming from COVID-19 vaccines, triggering more risk-taking.
“It has been a solid start to the week for oil markets, reflecting the vaccine tailwind driving strong risk appetite across all assets.
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“Although, COVID-19 cases continue to mount, the economic impact at present appears lessened by low desire to return economies to full lockdown – the incoming Biden team indicated as much at the weekend, flagging its preference for targeted measures.
“On the supply side, the Baker Hughes rig count showed a +10 w/w build to 236, continues to advance off the lows but is still very far below the ~400 needed to maintain production in the lower 48. Still, sentiment around the short-term oil price will be determined by COVID-19 demand effects and OPEC+ actions to offset them. At the same time, the longer-term market is a vaccine-driven one.”
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Bottom line
It is fair to say that the surprising news coming out from the world-leading COVID-19 vaccine markers viewing through the lens of oil markets, there are good chances of social mobility returning close to the pre-COVID-19 era later in 2021, thereby boosting the already weakened energy demand prevailing around the world.
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