After Pfizer Inc (PFE) (up 2.8%) and BioNTech SE (BNTX) (up 4.30%) announced the success of their coronavirus vaccine candidate at start of the last week, WTI crude oil prices ended down more than 2 percent on Friday, but jumped 8 percent over the week and 12 percent in two weeks, aiming for a sustainable economic rebound in 2021.
The December contract for U.S. light crude (WTI) fell 2.43 percent on the Nymex on Friday night to $40.13, while the Brent contract for January delivery dropped 1.72 percent to $42.78.
This week, cyclical stock market prices, as well as oil and sovereign interest rates, have galvanized on the possibility of a phased vaccination of population at the beginning of next year. However the announcement on Thursday of a sharp increase in U.S. crude oil inventories, followed by a sharp rise in U.S. cases of coronavirus, calmed investors somewhat over the weekend.
In the week ended November 6, commercial crude oil reserves rose by 4.3 million barrels, while the Bloomberg consensus was for a 1.9 million barrel decline. In the midst of a recovery from the pandemic, and a downturn in travel as the Thanksgiving holiday approaches on November 26, the surprised rise in oil reserves increases concerns of oversupply.
During this time, the governors of three states on the western coast of the United States, California, Oregon and Washington, have advised their constituents not to fly outside their states, while the State of New York has set up a 10 p.m. curfew for bars and restaurants started on Friday.
On Thursday, the city of Chicago requested its 2.7 million residents to stay home without coercive intervention, except for work, school or other important activities.
In recent weeks, oil prices have also received a boost thanks to signs of an extension of OPEC+’s productions control agreement. Observers and market players expect the group and its allies to delay from three to six months the return to the market of 1.9 million barrels per day, technically expected for 1 January 2021.
During the week, both the International Energy Agency (IEA) and OPEC, lowered their global oil demand estimates for this year and 2021, due to the second Covid-19 wave affecting Europe and the United States.