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Oil prices set for weekly gain amid vaccine rollouts, Bonny Light up $2.38

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Oil prices dipped on Friday but were on course for the sixth consecutive of gains, as the rollout of COVID-19 vaccinations boosted the optimism that fuel demand recovery would happen in 2021.

Brent crude, the benchmark for Nigerian crude grades, slipped by 13 cents or 0.26% to $50.12 a barrel at 12:07 West Africa Time, having climbed above $51 per barrel on Thursday.

U.S. West Texas Intermediate crude dropped 8 cents or 0.17% to $46.70, after advancing by roughly 3% in the last session.

Bonny Light, Nigeria’s flagship oil grade, lifted by $2.38 or 4.93% to $50.70 on Thursday, while Qua Iboe, another key national grade, was up by $1.36 or 2.78% to $50.34 in early trade on Friday.

Favourable vaccine trials helped dispel some gloom over unprecedented spikes in the number of fresh coronavirus infections fatalities globally, boosting oil prices.

The United Kingdom kicked off vaccinations this week and the U.S. might commence inoculations in the coming weekend, while Canada approved its first vaccine on Wednesday with initial shots due from next week.

Read also: Oil prices fall further amid soaring COVID-19 cases; Bonny Light gains $0.04

“The vaccine optimism … seems to continue unscathed due to the back-to-back approvals vaccines are getting and the quicker-than-previously-thought rollout of the first campaigns in key markets,” said Rystad Energy analyst Paola Rodriguez-Masiu.

Outside advisers for the United States Food and Drug Administration have voted to authorise emergency use to vaccinate a country that has lost over 285,000 lives to the coronavirus, a move expected to strengthen oil prices.

A build in U.S. oil inventories last week served as a reminder that a lot of supply is still available but it was ignored as bulls dominated the market this week, boosting oil prices.

Commenting on the latest movement in oil prices, PVM’s Stephen Brennock said “the long-awaited rollout of vaccination programmes provided ample bullish fodder in the face of rising US oil inventories.”

Indications that oil demand in Asia is strong also boosted prices and encouraged the market, with India’s largest refiner saying all of its nine units were running at 100% capacity for the first time since early this year.

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