By Barani Krishnan
Investing.com - Oil rallied for a fourth straight session on Monday as more promises of an ailing economy that could be liberated by Covid-19 vaccines sent crude prices to highs not seen since early September.
New York-traded West Texas Intermediate, the leading indicator for U.S. crude, settled up 64 cents, or 1.5%, at $43.06 per barrel. Earlier, at the height of the session, WTI hit a one-week peak of $43.34 — a level not seen since the high of $43.43 hit on Sept. 1.
London’s Brent, the global benchmark for oil, finished the session up $1.10, or 1.3%, at $46.06, after setting a three-month high of $46.13 earlier.
Oil rallied as British-Swedish drug company AstraZeneca (NASDAQ:AZN) said clinical trials showed its Covid-19 vaccine was 70% effective in protecting against the virus and could reach 90% on a second dose. The AstraZeneca vaccine could also be stored in an ordinary refrigerator and is likely to be much cheaper than a rival vaccine from Pfizer (NYSE:PFE), which announced on Nov. 9 a 95% efficacy-rate but super-freeze storage conditions.
The Pfizer news was followed by progress reported in another Covid-19 vaccine by Moderna (NASDAQ:MRNA) on Nov. 16.
Stephen Innes, chief global markets strategist at Australian brokerage Axi, said in just a matter of weeks, vaccine makers have done for oil what had taken OPEC months to achieve. Crude prices have tacked on about 20% over the past three weeks on vaccine-related news.
"Positive sentiment continues to be driven by the recent good news about the efficacy of coronavirus vaccines in development and the expectation that the OPEC+ meeting at the end of this month could see the group extend current cuts by 3-6 months,” Inne said.
OPEC+, which groups the 13-member Saudi-chaired Organization of the Petroleum Exporting Countries with 10 oil producing allies led by Russia, is expected to extend output cuts into the new year in an effort to avoid a global glut of inventories.
The group, which meets on Nov. 30 and Dec. 1, is looking at options to delay by at least three months from January the tapering of their 7.7 million barrel per day cuts by around 2 million bpd.
Oil prices were also underpinned Monday by data from closely-followed market intelligence firm Genscape showing a drop of 1.42 million barrels at at the Cushing, Oklahoma delivery point for contracted supplies of WTI.