Brent Surpasses $50 for First Time since March
Brent has surpassed $50/barrel on December 10 for the first time since March, amid further progress on the coronavirus (Covid-19) vaccination front.
The benchmark is currently trading at $50.14/b, up from a closing price of $48.86 on December 9. The UK notably began vaccinations this week, while Canada became the third country on December 9 to authorise the use of the Covid-19 vaccine produced by Pfizer and BioNTech, meaning it could start its immunisation programme as early as next week.
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Commentators also pointed to robust oil demand in Asia and an attack on an Iraqi oilfield, which more than offset the impact of an increase in US crude inventories.
Oil prices collapsed over March and April, after Russia and Saudi Arabia launched an ill-timed price war ahead of agreeing record production cuts, and countries across the world imposed lockdowns to slow the pandemic's spread. Brent then saw a slow recovery over the summer.
This recovery showed signs of stalling in the autumn, as countries imposed another round of restrictions to tackle a second Covid-19 wave. Brent has been rising fairly steadily since early November, however, after Pifzer and BioNtech reported very promising results from their vaccine trials. This is despite the Opec+ agreeing earlier this month to bring back 500,000 b/day of oil supply in January, against expectations that the group would maintain current cuts for longer.
Higher oil prices could mean more associated gas supply coming back on stream at oilfields where production was reduced during this year's downturn. They will also feed into gas prices further down the line, because of oil indexation in some gas supply contracts.