Oil rose for a fourth straight session on Wednesday as the market shrugged off an industry report showing U.S. crude stockpiles rose more than expected, extending a rally driven by hopes that a COVID-19 vaccine will boost fuel demand.
Brent crude was up 53 cents, or 1.1%, at $48.39 a barrel by 0956 GMT, having risen almost 4% in the previous session.
West Texas Intermediate crude gained 38 cents, or 0.8%, to $45.29, after rising more than 4% on Tuesday.
“Crude oil prices are trading at their highest levels since early March, supported by positive market sentiment as a result of vaccine news and strong oil demand in Asia,” said UBS oil analyst Giovanni Staunovo.
“We maintain our bullish outlook for next year and target Brent to hit $60 per barrel at the end of 2021,” he added.
AstraZeneca said on Monday its COVID-19 vaccine was 70% effective in trials and could be up to 90% effective, providing another weapon in the fight to control the pandemic.
The formal start of U.S. president-elect Joe Biden’s transition to the White House has also improved the global outlook.
A weak dollar has also provided support for crude prices as a lower dollar makes oil less expensive for buyers.
“The recent depreciation of the U.S. dollar has helped temper the impact of surging oil prices for some of the world’s largest consumers of energy,” said Stephen Brennock of broker PVM.
The market seemed shrug off latest data from the American Petroleum Institute (API) on Tuesday that showed U.S. crude stocks rose by 3.8 million barrels in the week to Nov. 20 to around 490 million barrels.
Official U.S. government crude inventory data will be released later on Wednesday.
Analysts also said that a viable vaccine was not likely to be ready for mass use in the next few months, meaning lockdowns and travel restrictions will be in place into next year.
That makes it likely that OPEC+, made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, will continue production cuts into 2021 after a meeting set to start on Nov. 30 following technical talks this week.
OPEC+ producers have been withholding supplies to support prices after pandemic lockdowns earlier this year caused an evaporation in demand.
They are currently due to increase production by 2 million barrels per day — about 2% of global demand before the pandemic — from January.