Oil markets may take advantage of the prospects of a coronavirus vaccine developed by Pfizer Inc. and BioNTech to stabilise, Bloomberg reported today.
Last week, crude oil prices soared to their highest level in 2020 after Pfizer and German biotechnology company BioNTech announced a breakthrough on a vaccine for COVID-19.
According to Bloomberg analysts, such a discovery will ease concerns about consumer-driven demand, particularly for fuels, though it will be the first quarter 2021 at the earliest before a vaccine is widely available.
Brent crude ended trading Friday up 8.4 per cent to finish the week at $42.78 per barrel.
Possible changes to OPEC+ pact lead to 6% surge in oil prices
In the interview with Bloomberg, Tamas Varga with London oil broker PVM said the market was bullish for most of the week, rightly or wrongly, on the vaccine news.
"With the next OPEC+ meeting two weeks away, we can expect more frequent rhetoric on easing/rolling over/deepening the current supply constraints," Varga said.
"This rhetoric is expected to have a major influence on oil prices, in my opinion."
"With that news behind us, the market may look to OPEC for clues," he added.
According to a report by the Organisation of the Petroleum Exporting Countries (OPEC), the world's top 12 publicly-traded oil-producing companies posted a total net loss of more than $20 billion in the first quarter of 2020 as the spread of the novel coronavirus (COVID-19) brought global transportation to an almost complete halt. Low demand pushed crude prices to plummet in April to their lowest level since 1999.