Oil was down ever so slightly on Friday morning in Asia, with prices holding on after a sharp rally overnight, as the rollout of COVID-19 vaccines increased hopes that fuel demand would recover in 2021.
Brent oil futures inched down 0.10% to $50.20 by 3:13 AM GMT, giving up some earlier gains but with prices remaining above the $50 mark. WTI futures inched down 0.02% to $46.77.
Prices had looked set for a sixth consecutive week of gains, with positive vaccine news helping to disperse the gloom over ever-increasing numbers of COVID-19 cases globally, with some countries seeing record numbers of cases and deaths.
The U.K. began a mass inoculation program for BNT162b2, the COVID-19 vaccine co-developed by Pfizer and BioNTech SE, during the past week. Health Canada approved the shot on Wednesday, with inoculations due to begin in the following week.
“The recovery from the pandemic will accelerate once a vaccine is widely available, further supported by ongoing fiscal and monetary stimulus from governments around the world,” ANZ Research analysts said in a note.
The U.S. is set to be the next country to approve BNT162b2. A panel of outside advisers to the U.S. Food and Drug Administration (FDA) on Thursday voted 17-4 to endorse emergency use of the shot, which is set to clear the way for an emergency use authorization from the FDA within days. Vaccine distribution and inoculations in the U.S. are set to begin almost immediately after the clearance.
A potential hiccup to the market, in the form of larger-than-expected builds in U.S. crude oil supplies reported by the U.S. Energy Information Administration (EIA) and the American Petroleum Institute (API) was largely ignored as bullish sentiment ran through the market during the week.
EIA supply data, released on Wednesday, showed a 15.189-million-barrel build for the week to Dec. 4, while Tuesday’s API data showed a 1.141-million-barrel build.
Investors were also encouraged by signs of strong Asian demand. India’s biggest refiner Indian Oil Corporation Ltd. said on Thursday that it was operating at 100% capacity of all its nine units for the first time since early 2020.
Some investors expected the black liquid’s rally to continue.
“The broad market rally is expected to continue next year, with commodities set for a positive year amid an improving economic backdrop,” the ANZ note added.