On Thursday, both Brent and US West Texas Intermediate (WTI) crude oil futures’ prices gained as much as 3 per cent with UK crude rounding off the session above $50 a barrel for the first time since early-March, largely buoyed up over hopes that a near-term rollout of pandemic vaccines across the United States and Europe would lead to an earlier-than-anticipated economic recovery.
In point of fact, Thursday’s rally in crude oil futures’ prices came against the backdrop of a stubborn upsurge in US crude inventory build, while pandemic vaccine hopes appeared to be strong enough to fend off the impacts of a likely supply glut in a near-term outlook.
According to data from EIA (Energy Information Administration) released earlier in the US trading hour, US crude oil inventories had witnessed a havoc-scale rise of 15.2 million barrels last week. Aside from that, while market participants remained Panglossian over a pandemic vaccine rollout that could lead to a Miltonian spike in crude oil demands across the globe, the United Kingdom had already started off a broad-based vaccination program this week and the United States alongside its western allies are expected to begin inoculation as soon as over the weekend.
On top of that, Canada, the resource-rich US ally, said on Wednesday that it would initiate a vaccination program by next week, eventually spurring up hopes over an abrupt spike in crude oil futures’ prices.
Crude rises offsetting solid US inventory build
Citing statistics, as a rapidly growing investors’ optimism over a pandemic vaccine coupled with an OPEC+ move to ditch out a planned rise in output by 2 million barrels per day from January, had been adding a bullish bias to black gold futures’ prices, UK crude gained as much as 2.8 per cent to $50.25 per barrel, extending its rally for a third straight session, while US WTO crude oil futures’ prices wrapped up the day just a notch shy of 3 per cent higher to $46.78 a barrel.
Meanwhile, referring to investors’ hope over a quicker rise in global oil demands following pandemic vaccine rollouts, Rystad Energy’s head of oil markets, Bjornar Tonhaugen said on the day’s commodity market closure, “It is not every day that the market ignores weekly builds of U.S.
crude inventories. Fast-tracking vaccinations is raising hopes that oil demand will benefit quicker and the North American markets are major consumers. ”