Oil rose in New York as Moderna Inc. reported its Covid-19 vaccine is highly effective against the virus.
Moderna’s shot had 94.5% efficacy in a preliminary analysis of a large, late-stage clinical trial. That followed similar positive news for a vaccination being developed by Pfizer Inc. last week, buoying risky assets globally.
The full impact of a vaccine on crude demand is still some way off. Yet prices were also buoyed by a monthly rebound in China’s oil processing, with consumption in Asia still vastly outpacing that of other regions.
While the near-term demand picture shows European consumption wavering as lockdowns re-emerge, the U.S. plans more local measures rather than nationwide restrictions to tackle the virus. The uneven demand outlook presents a challenge for OPEC+, whose monitoring committee meets Tuesday before a key policy gathering at the end of the month to decide on production.
In the latest sign that the demand recovery east of the Suez Canal is offsetting weakness in the West, Brent’s market structure has firmed sharply. The global benchmark’s nearest timespread—a gauge of market health—touched its strongest since mid-July, while those for the second half of 2021 also gained on the renewed prospect of a vaccine.
“The Brent curve structure continues to firm, global oil inventories continue to decline, a very promising vaccine is on the horizon” and OPEC+ will likely keep supporting the oil market, said Bjarne Schieldrop, chief commodities analyst at SEB AB.
China’s crude refining rose to 14.14 million barrels a day in October, matching a record set in June, as more plants processed oil to replenish inventories after a holiday demand boost. Meanwhile, total petroleum consumption in India climbed 2.7% last month—from a year earlier—the first annual increase since February.
While India’s fuel demand pulled back slightly at the start of this month, there are still signs its crude purchasing is picking up. Indian Oil Corp. has issued a raft of tenders to purchase West African oil in recent days, while its buying of Nigerian cargoes has gained, traders said.
