Oil prices bounced back today as optimism over a new coronavirus vaccine compounded encouraging economic figures from China and Japan and encouraged traders.
After picking up 10 per cent on the back of the news of an effective coronavirus vaccine, prices flagged on Thursday and Friday as growing numbers of Covid cases brought markets back down to earth.
But on the stroke of midday Moderna announced that its new coronavirus vaccine was 95 per cent effective.
The news spurred on Brent crude, which rose 3.7 per cent today to trade at $44.36, while West Texas Intermediate rose four per cent to $41.80.
Data from the world’s second biggest economy showed that factory output grew at a quicker rate than expected, and retails sales surged.
And in Japan, GDP rose at a rate of 21.4 per cent in July-September, following a 28.8 per cent plunge in April-June.
Carlo Alberto De Casa, chief analyst at ActivTrades, said: “The general enthusiastic scenario is supportive for oil prices, which started the new week still in green.
“Markets are still in full risk on mode with investors betting on a vaccine and with it a relatively quick solution to the pandemic and this optimism is boosting oil.
“Sectors previously left behind, such as energy, are now enjoying time in the limelight and this is pulling up the price of both WTI and Brent.”
The rises come with producer alliance Opec+ due to meet tomorrow to discuss extending output curbs from January.
The group is currently due to increase production by 2m barrels a day in the new year, but de facto leader Saudi Arabia has suggested that it might extend existing curbs.
Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, added: “There is no denying that the oil market is fully in the hands of OPEC+.
“The organisation is the only reason why oil prices today are not $20 per barrel, and their upcoming meeting on 30 November – 1 December is hugely important.
“But, their decision will be easy with the Pfizer vaccine news last week – keep current cuts or even cut a little deeper.”