Series of positive COVID-19 vaccine news bolstered oil prices in the early hours of Tuesday, while expectations that OPEC and allies are likely to extend production cuts by another three months further aided the commodity outlook.
The Brent crude, against which Nigerian oil is priced, gained 16 cents or 0.4 percent to $43.98 a barrel at around 4 am Nigerian time on Tuesday. The U.S West Texas Intermediate crude rose by 13 cents or 0.3 percent to $41.47 a barrel.
Prices rose after Moderna, an American biotechnology company based in Cambridge, Massachusets, said its COVID-19 vaccine trial was 95 percent effective in 30,000 patients.
The news boosted global stocks on Monday with Moderna share rising by almost 10 percent to $98.03 per share.
Experts have started making adjustments to their projections as they are now predicting that the global economy could be open for mobility as early as the second half of 2021 despite the lockdown in the United Kingdom, other European nations and even the second likely lockdown in the United States.
“If we judge economic recovery, particularly through the lens of oil markets … with multiple high efficacy vaccines in the pipeline, there is good chance mobility will return close to pre-pandemic levels later in 2021,” said Stephen Innes, chief global markets strategist at Axi in a note.
“Oil demand in China is exceeding pre-COVID-19 levels which suggests oil demand is not permanently impaired,” analysts from Bernstein Energy said.
“This is in line with mobility data and supports the view that oil demand has not been structurally damaged by changes in behavior post COVID-19 for countries which emerged successfully from COVID-19.”