Oil prices have risen to the highest level since March on Tuesday, after a raft of positive vaccine news sparked a comeback in one of the sectors hardest hit by the pandemic coupled with the news on the start of the U.S. presidential transition process.
Brent crude, the international benchmark, gained more than 4 percent on Tuesday to reach as high as $48 a barrel during afternoon trading in London, as traders bet that travel and other energy-intensive industries would pick up in 2021 if coronavirus can be brought under control.
U.S oil, Western Texas Intermediate (WTI) rose as high as $45.2 per barrel.
Nigerian Banner oil, Bonny Light stood at $45.79 per barrel.
In April oil price crashed into the negative territory for the first time in history due to the fear of supply glut following low demand, triggered by lockdown in several countries.
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Oil have averaged just $42 a barrel this year compared to $64 a barrel in 2019 and $71 a barrel in 2018.
Analysts at PVM oil brokerage in London said that traders were increasingly treating the prospect of vaccines as a “game-changer” for the energy sector, though prices remain well below the near $70 a barrel they traded at before the pandemic.
Global oil demand, which averaged about 100m b/d before the pandemic, has been down by about 10 percent on average this year as flights have been grounded and as many people have worked from home rather than commuting to the office.
In another development, Saudi Arabia, confirmed that Houthi rebels in Yemen targeted an oil facility in northern Jeddah province, a reminder of the ever-present risk of instability in the region. The Kingdom’s energy minister said that the attack on Monday caused a fire at an oil tank inside a fuel-distribution center, according to Bloomberg report.
By: Ifunanya Ikueze