Oil prices rise amid hope of COVID-19 vaccine, Bonny Light gains $0.71

Oil prices climbed by over one percent on Monday, sustaining the gains recorded in the week that just went by as traders targeted a swift recovery, following positive outcomes of COVID-19 tests.

Confidence was also boosted by the possibility of the Organisation of the Petroleum Exporting Countries (OPEC) and allies led by Russia (a cartel known as OPEC+) prolonging a production cut agreement.

Brent crude lifted by 94 cents to $45.90 a barrel by 10:13 West African Time just as United States West Texas Intermediate crude jumped 76 cents to $43.18. The two jumped 5 percent last week.

Bonny Light, Nigeria’s premium oil grade, was up by 71 cents at $44.56 on Friday while Qua Iboe, another key national grade, climbed to $43.46.

The market is in a contango, a situation where the prices of front-month delivery contracts are weaker than delivery prices six months after, and this tightened to 32 cents U.S. cents, the lowest since the middle of June, implying that glut fears are vanishing.

Read also: Oil prices on course for third successive weekly gain, Bonny Light sheds $0.54

Demand prospect has been brightened by news that advancement is being recorded in inventing vaccines, which protect against COVID-19 vaccines.

Immunisations in the U.S. might commence in a day or two days’ time after regulatory nod was obtained.

AstraZeneca, a Swedish-British pharmaceutical multinational, announced on Monday that its COVID-19 remedy, jointly developed with Oxford University, could have 90 percent efficacy under one dosing regimen.

PVM’s Stephen Brennock said the report was removing sentiment from “gloomy fundamentals.”

“Investors are ignoring near-term headwinds, chief among which are surging global COVID infections, and instead looking ahead to next summer,” he told Reuters.

OPEC+ will deliberate on the possibilities available to extend their oil supply deal by a minimum of three months starting from January.

On Monday, the Iran-aligned Houthi group in Yemen said it shot a missile, which hit a Saudi Aramco site in Jeddah, in the western part of the kingdom. Saudi Arabia did not confirm claim immediately. The oil assets of the state-owned company are in the east of the country.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now