Oil prices jumped 27% or more for November, their biggest leap since the disaster of spring 2020 when crude prices tumbled into negative territory for the first time in history.
A surfeit of positive news on Covid-19 vaccines, including the possibility of Americans getting their first doses before Christmas, has fueled the remarkable rebound in oil, which fell to as low as minus $40 per barrel in April. Also underpinning the rally is the expectation that the OPEC+ producer group will halt any output hike to preserve the market momentum.
London’s Brent, the global benchmark for oil, finished the session down 30 cents, or 0.6%, at $48.18. For November, Brent rose 28%, its best month since a 95% hike in May from April’s lows.
New York-traded West Texas Intermediate, the leading indicator for U.S. crude, settled down 19 cents, or 0.4%, at $45.34 per barrel. For the month, however, WTI gained 27%, also the best recovery since May.
“WTI crude is softer for a second consecutive day but still comfortably above the $44 level as Covid-19 vaccine progress has investors pricing in a much stronger crude demand outlook for the second half of the year,” said Ed Moya, senior market strategist at OANDA in New York.
“The tug-of-war between the short-term demand outlook with rising expectations for 2021 to deliver the return of pre-pandemic life should keep WTI crude around the mid-$40s for now.”
Oil prices have risen with little pause since mid-November after a rash of positive announcements on Covid-19 vaccine trials and therapeutics.
U.S. Health Secretary Alex Azar told a CBS interview on Monday that if all went well, Americans could get their first shots of the coronavirus vaccine before Christmas, well before any previously anticipated deadline. Azar said this after Moderna (NASDAQ:MRNA) Inc became the second drug company on Monday to apply for emergency authorization with the Food and Drug Administration to push out doses to curb the virus.
Pfizer Inc (NYSE:PFE), which filed for similar FDA approval earlier this month, used United Airlines Holdings Inc (NASDAQ:UAL) to airlift the first mass shipment of its Covid-19 vaccines to Chicago on Friday, CNBC reported.
On the OPEC+ front, the 13-member Saudi-steered Organization of the Petroleum Exporting Countries, with 10 allies led by Russia, looked likely at a meeting on Monday to halt any further production hikes that could negate the oil rally.