Oil prices today hit their highest levels since the spring’s historic collapse as traders continued to celebrate news of yet another effective coronavirus vaccine.
Brent crude jumped 3.9 per cent across the day to touch $48 – the highest the global standard has traded at since Opec initiated a price war with Russia at the beginning of March.
The oil producer group’s decision to remove all production curbs after failing to come to a deal with Russia prompted prices to plummet to levels not seen this millennium.
It was Opec’s decision, taken just as coronavirus lockdowns were becoming a reality across the world, that kickstarted months of volatility in the oil market, from which prices are finally beginning to recover properly.
US benchmark West Texas Intermediate followed suit and climbed 4.3 per cent to stand just below the $45 mark, a level it has been threatening to breach for several weeks.
Edward Moya, senior analyst at Oanda, said: “WTI crude finally surged beyond major resistance that has been firmly in place since the summer.
“Bullish momentum is here, but the shortened trading week could see this rally fizzle around the $45 level.
“The path for oil should be higher in 2021 as COVID vaccines will bring much of the world back to pre-pandemic life which will trigger a strong rebound for crude demand.”
Yesterday Astrazeneca said that the vaccine it has been developing with the University of Oxford was 90 per cent effective.
Moderna and Pfizer have made similar announcements in the last couple of weeks, prompting a spectacular market rally.
Prices could get another bump next week, with Opec set to meet with allies including Russia to discuss extending existing output curbs.
Production limits have been crucial to restoring stability to the market, but are due to be loosed by 2m barrels a day from January.
However, de facto Opec leader Saudi Arabia is said to be open to extending the curbs.