Brent crude price rose above the $43.55 price levels as some oil traders remained hopeful. The Tuesday trading session in London showed that the Brent crude price was bullish and that the series of woes bedeviling the crude oil market is soon coming to an end, because of the positive news of the development of vaccines by drugmakers.
Against the backdrop of the concerns of new restrictions due to a surging number of COVID-19 cases, stakeholders in the industry are still optimistic. Brent crude futures gained 1.46%, at trade at $43.91 by 9.45 am GMT, while West Texas Intermediate (WTI) rose 0.91% to trade at $41.81.
The oil price recovery is linked to the coronavirus vaccine the University of Oxford is developing with AstraZeneca Plc. More so, there are true indications and promising results in early human testing, which signifies light at the end of the tunnel.
Furthermore, the S&P 500 Index rose and AstraZeneca also gained as a positive outcome had been widely expected with the vaccine already in more advanced trials.
Still, crude futures in New York were unable to eke out a strong rally after earlier falling as much as 1.9% in the wake of pandemic-driven demand concerns.
The senior market analyst at Price Futures Group Inc, Phil Flynn said, “In the short-term, there are still some challenges, but if we do get closer to a vaccine, the market may be able to forget the short-term demand weakness with the expectation it’s going to come back a lot stronger down the road”.
How Is China Affecting The Oil Market Rebound
Recall, that the second-largest economy, China reopened some of its cinemas after a six-month closure. Also, this move raised the hopes amongst crude oil traders that a recovery from the pandemic is in place.
However, Chinese demand is cooling off, which is a warning sign for the oil market. Also, a rebound in consumption in the Asian giant helped drive crude higher, but the price of physical oil barrels traded in Asia has slipped with the country’s buying spree slowing in recent weeks.
More so, there are some negative sentiments around the market, due to the U.S. company, Chevron Corp. likely to begin ramping up shale production as the OPEC+ alliance prepares to unleash crude back onto the market next month.
- The more-active September futures added 1 cent to $40.76 a barrel.
- Brent for September settlement was unchanged at $43.14 a barrel.
- Brent crude futures gained 1.46% while West Texas Intermediate (WTI) rose 0.91% to trade at $41.81.
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