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Oil futures rose Monday, with support tied to the U.S. rollout of the a COVID-19 vaccine, as well as an explosion on an oil tanker docked at the Saudi Arabian port of Jeddah.
West Texas Intermediate crude for January delivery CL.1, +1.70% CLF21, +1.70% rose 46 cents, or 1%, to $47.03 a barrel on the New York Mercantile Exchange. February Brent crude BRN00, +1.48% BRNG21, +1.48% was up 52 cents, or 1%, at $50.49 a barrel on ICE Futures Europe, after the global benchmark last week traded above $50 for the first time since March.
Efforts to roll out the COVID-19 vaccine developed by Pfizer Inc. PFE, -1.46% and BioNTech SE BNTX, -1.73% and given emergency authorization by the U.S. Food and Drug Administration late Friday began over the weekend.
Meanwhile, a bipartisan group of Senate and House lawmakers, which has pushed for a compromise $908 billion plan, were reportedly weighing the possibility of putting $160 billion of state and local aid and liability protections into a separate package, leaving a $748 billion aid plan that would provide $300 a week in additional state unemployment benefits for four months, $300 billion in aid to small businesses and $35 billion for health-care providers, The Wall Street Journal reported.
Some analysts wondered if crude would be able to keep pressing higher as COVID-19 cases continued to surge in the U.S. and elsewhere.
“I do wonder whether [the rally] is running out of steam though and given the near-term downside risks as Germany goes into a more severe lockdown and the US sees record cases and fatalities, with the trajectory still in the wrong direction going into the holiday period, that could create some downside pressure in the coming weeks,” said Craig Erlam, market analyst at Oanda, in a note.
“With OPEC+ remaining flexible though, downside risks may be more limited than we would otherwise see,” he said.
Crude may also be finding some support, analysts said, after an oil tanker docked at Jeddah was struck and suffered an explosion, WSJ reported, citing the ship’s owner — an incident that comes after a string of attacks on Saudi Arabia’s oil infrastructure in recent months.
