LONDON – Oil hit its highest since in March on Tuesday, rising above $47 a barrel as a third promising coronavirus vaccine raised demand recovery hopes and U.S. President-elect Joe Biden received the go-ahead to begin his transition.

Oil hits highest since March on vaccine and Biden transition- oil and gas 360

Source: Reuters

AstraZeneca on Monday said that its COVID-19 shot was 70% effective in trials and could be up to 90% effective, giving the fight against the pandemic a third potential vaccine after positive results from Pfizer-BioNTech and Moderna.

Brent crude rose $1.16, or 2.5%, to $47.22 a barrel by 1445 GMT and hit a session peak of $47.23, its highest since March 6. U.S. West Texas Intermediate crude gained 88 cents, or 2%, to $43.94.

“The fight against the coronavirus is intensifying and is proving to be increasingly successful,” said Tamas Varga of broker PVM. “Next year’s oil demand estimates are bound to be amended upwards.”

This is Brent’s highest since the collapse of an OPEC-led output pact sent prices crashing in March.

Also supporting oil and wider financial markets, U.S. President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s administration.

“In the short term, this is good for markets in general as well as for the oil market,” said Bjarne Schieldrop of SEB.

Expectations that U.S. crude inventories edged lower last week also added support. The first of this week’s U.S. supply reports is due at 2130 GMT from the American Petroleum Institute.

After the March collapse of OPEC’s previous output pact led to a brief Saudi Arabia-Russia price war, OPEC and allies agreed a new deal on record production cuts to support prices.

OPEC+, as the group is known, is expected to roll over those cuts into 2021 after a meeting over Nov. 30 to Dec. 1 following technical talks this week.

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