Oil prices jumped by 4 percent early on Monday, bolstered by another potential vaccine breakthrough, as well as bullish economic data from China.
As of 9:14 a.m. ET on Monday, WTI Crude was up 4.46 percent at $41.92 and Brent Crude was trading up 3.95 percent at $44.48.
Prices shot up after Moderna said on Monday that the Phase 3 study of its vaccine candidate—which had enrolled more than 30,000 participants in the U.S.—had met statistical criteria with a vaccine efficacy of 94.5 percent. Moderna plans to file for an Emergency Use Authorization (EUA) with the U.S. Food and Drug Administration (FDA) in the coming weeks and submit applications for authorizations to global regulatory agencies.
Moderna’s vaccine news comes a week after Pfizer and BioNTech announced 90-percent efficacy of their COVID-19 vaccine candidate, sending oil prices soaring by 10 percent last Monday.
A vaccine for many people around the world will unlikely be available until late into 2021, but the oil market was buoyed by other—immediate—bullish news today.
In China, crude oil refinery throughputs increased by 2.6 percent year on year in October, setting a new refinery run record of 14.09 million barrels per day (bpd), according to Reuters calculations of official Chinese data. The previous record was 14.08 million bpd, set in June this year. Chinese fuel demand held firm last month, with gasoline demand steady during a holiday early in October, while domestic jet fuel demand has nearly reached pre-crisis levels, analysts told Reuters.
Related: EIA Sees WTI Crude Averaging $44 In 2021
In another bullish note for oil, Joe Biden’s COVID advisory team said on Sunday that a national lockdown in the United States would be a “measure of last resort,” which gave markets hope that the economy and oil demand would not be as severely hit as they were in the lockdown in the spring.
Later on Monday and on Tuesday, oil market participants will turn to the OPEC+ monthly panel meetings for hints from ministers about the alliance’s plans about a potential delay of the easing of the production cuts.
“We are still of the view that OPEC+ will need to extend current cuts of 7.7MMbbls/d by at least another 3 months, in order to ensure that the market draws down inventories over the first quarter of next year,” ING strategists Warren Patterson and Wenyu Yao said on Monday.