Oil hit a nine-month high on Friday and was headed for a seventh straight weekly gain as investors focused on the rollout of COVID-19 vaccines and looked past rising case numbers and tighter lockdowns in Europe.
Pfizer has applied for approval in Japan for its vaccine, which is being used in the United Kingdom and the United States. U.S. Vice President Mike Pence said U.S. approval for Moderna’s shot could come later on Friday.
Brent crude was 50 cents, or 1%, higher at $52.00 at 1447 GMT, having reached $52.02, its highest since March. U.S. West Texas Intermediate (WTI) crude was up 46 cents at $48.82 after touching $48.87, its highest since February.
“Oil prices are very healthy under the circumstances,” said Bjornar Tonhaugen of Rystad Energy. “Market euphoria has not stopped really.”
U.S. lawmakers are trying to agree a coronavirus relief package but a new potential roadblock emerged as some Senate Republicans insisted on language ensuring that expiring Federal Reserve lending programmes cannot be revived.
“Looking ahead, oil prices should continue to find support from the prospect of a COVID relief bill and accelerating vaccine rollouts,” said Stephen Brennock of oil broker PVM.
Even so, surging virus case numbers in major economies and new movement restrictions in Europe are impacting the immediate prospects for oil demand. The number of U.S. cases rose by at least 239,018 on Thursday.
Oil gained support this week from weekly U.S. supply data showing crude inventories fell by 3.1 million barrels, more than expected.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are supporting the market by slowing the pace of a planned increase in supplies next year.
OPEC+ plans to add 500,000 barrels per day of supply in January and will meet in early January to decide on next steps.