The international crude oil market recorded an almost 10 percent price increase on Monday, its highest daily gain in over six months. The price surge occurred after pharmaceutical company, Pfizer announced promising results for its COVID-19 vaccine candidate and Saudi Arabia said an OPEC+ oil output deal could be adjusted to balance the market.
Pfizer and BioNTech had stated on Monday that their jointly developed vaccine is 90 percent effective in mitigating COVID-19 infections according to findings in its ongoing phase 3 trials.
The message of hope was somewhat a confluence for both US President Donald Trump and President-elect Joe Biden as both leaders cheered the report, offering their congratulations to Pfizer on its landmark achievement.
Nigeria’s President, Muhammadu Buhari also welcomed the development and expressed hope that the vaccine would be available for all when it finally hits the market.
America’s Pfizer and its German partner, BioNTech, will produce 1.3 billion doses of the vaccines for 650 million people by the end of 2021.
While the global benchmark, Brent crude, was up $3.37, or 8.5 per cent, to $42.82 a barrel, the US West Texas Intermediate crude was up $3.54, or 9.5 per cent at $40.68.
Both contracts rose by more than $4 earlier in the session.
Nigeria’s 2021 budget was predicated on an oil price of $40 per barrel and daily production of 1.86 million barrels.
Reuters quoted analysts as saying that “in the eyes of oil traders, a vaccine will help ensure no future lockdowns are needed and will bring people back to the streets, allowing road and air transport to recover.”
Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, also said the OPEC+ deal on oil output cuts could be adjusted if there was consensus among members of the group.
The Saudi minister was commenting after being asked whether OPEC+ – which groups OPEC states, Russia and other producers – would stick to existing cuts of 7.7 million barrels per day (bpd) rather than easing them to 5.7 million bpd from January.
Key members of the Organisation of the Petroleum Exporting Countries (OPEC) are wary of U.S.
President-elect Joe Biden relaxing measures on Iran and Venezuela, which could mean an increase in oil production that would make it harder to balance supply with demand.
Analysts have also hinted that while a Biden presidency increases the likelihood of Iranian oil supply returning to the market, this is not something that will happen overnight.
However, renewed European lockdown measures to contain rising COVID-19 cases still appear set to weigh on the outlook for global oil demand, an International Energy Agency (IEA) official said.
America’s Pfizer and its German partner, BioNTech, are expected to produce 1.3 billion doses of the vaccines for 650 million people by the end of 2021.
Eight months into the worst pandemic in a century, the development represents the most encouraging scientific advancement so far in the battle against COVID-19.
And its preliminary results pave the way for the companies to seek an emergency-use authorisation from regulators if further research shows the shot is also safe.
The vaccine findings are based on an interim analysis conducted after 94 participants, split between those who got a placebo and those who were vaccinated contracted COVID-19.
Pfizer Senior Vice President, Mr. William Gruber, said: “The trial will continue until 164 cases have occurred. If the data hold up and a key safety read-out also looks good, it could mean that the world has a vital new tool to control a pandemic that has killed more than 1.2 million people worldwide. This is about the best news for the world, the United States and for public health. It was better than even the best result we had hoped for.”
The Chief Executive Officer, BioNTech, Ugur Sahin, said: “With effectiveness for the first vaccines previously expected to be in the range of 60 per cent to seven per cent, more than 90 per cent is extraordinary. It shows that COVID-19 can be controlled. At the end of the day, it’s really a victory of science.
“The data do have limits. For now, a few details on the vaccine’s efficacy are available. It is not known how well the shot works in key subgroups, such as the elderly. Those analyses haven’t been conducted. And it isn’t known whether the vaccine prevents severe disease, as none of the participants who got COVID-19 in this round of analysis had severe cases.”
The vaccine is being tested in a two-dose regimen. The trial started in July and since most participants only received their second dose much more recently, nobody knows how long any protection will last.
However, the strong reading from the first large-scale trial to post efficacy results holds well for other experimental vaccines, in particular, one being developed by Moderna Inc. that uses similar technology.
Pfizer expects to get two months of safety follow-up data, a key metric required by US regulators before an emergency authorisation is granted in the third week in November.
If those findings raise no problems, Pfizer could apply for authorisation in the US this month.
A rolling review began in Europe last month and Sahin said regulators there are working with BioNTech to “further accelerate the process.”
So far, the trial’s data monitoring committee has identified no serious safety concerns, Pfizer and BioNTech said.
The positive preliminary data mean the US pharma giant and its German partner are on track to be first with a vaccine, after signing advance deals with governments worldwide for hundreds of thousands of doses.
Meanwhile, the companies have said they will produce 1.3 billion doses, enough to vaccinate 650 million people, by the end of 2021. Only 50 million doses are expected to be available in 2020.
However, Pfizer has found itself drawn into a contentious political debate about how quickly regulators in the US should allow a vaccine to be given to Americans.
President Donald Trump had pushed to have a shot approved before Election Day, but regulators put in place rigorous standards that largely pushed that goal out of reach.
On October 16, Pfizer Chief Executive Officer, Albert Bourla, had said the companies could seek an emergency use authorisation from US regulators by late November if the trial results were to show the shot is safe and effective.
Writing in an open letter, Bourla quelled fears that Pfizer might be racing the clock to bring out a vaccine before the presidential election.
Pfizer and BioNTech have a $2 billion deal to supply 100 million doses to the US, with an option for 500 million more. Among the frontrunners, theirs is the only vaccine project that did not take funding from the White House-led Operation Warp Speed programme to bolster research, development or manufacturing. BioNTech received up to 375 million euros ($445 million) in development funding from the German government, however.
Moderna is considered the next closest vaccine frontrunner. It has said it could get safety and efficacy data from its late-stage trial this month. Johnson & Johnson, which has a one-shot vaccine using a different technology could get efficacy data from a final-stage trial by the end of this year. AstraZeneca Plc is also working on a vaccine using different technology, with results from studies in the U.K. and Brazil expected by year-end.
Reacting to the vaccine discovery, Trump on his Twitter page, said: “Stock market up big. Vaccine coming soon. The report shows 90 percent effectiveness. Such great news.”
Biden, who inaugurated a COVID-19 taskforce yesterday said: “I congratulate the brilliant women and men who helped produce this breakthrough and to give us such cause for hope.”
But he cautioned it is “important to understand that the end of the battle against COVID-19 is still months away.”
The president-elect said the announcement was “part of a previously announced timeline by industry officials” and that it does not alter the fact that “Americans will have to rely on masking, distancing, contact tracing, hand washing, and other measures to keep themselves safe well into next year.”
