Crude oil price reached $5o per barrel, following the rollout of COVID-19 vaccine. This development has led to bullish expectations of strengthening demand early next year. The pandemic has had an adverse effect on the world energy market.
The prices improved following Canada’s approval of the Pfizer-BioNTech vaccine. Canada’s health authorities gave consent for the vaccine in midweek, the first shipment is expected to arrive by the end of the year.
The UK has begun vaccinating vulnerable people and essential services workers. The first recipient of the vaccine in the UK received their shot on Tuesday.
Hopes of faster-than-expected vaccine releases reversed the oil market sentiment to bullish mode, despite huge crude oil inventory build of 15.189 million barrels for the week to December 4. as stated by the EIA.
This rise in crude inventories came close to the largest crude build ever, which was recorded earlier this year for the week ending April 10, when the EIA reported a 19.25 million barrel inventory build.
The market was already ignoring the massive build last week due to the vaccine hopes and signs that oil demand in Asia continues to recover and be a bright spot on the market.
Indian Oil Corp, the biggest refiner in the world’s third-largest oil importer, said its refineries operated at 100-per cent capacity in November, for the first time since the pandemic started, in order to meet growing domestic fuel demand.
On one hand, this development would see Nigeria’s foreign exchange earnings rise while on the other, it would see the pump price of petrol rise, which is expected to worsen the inflation situation in the country.