Crude oil price rides on vaccine news as investors await the U.S. oil inventories

Crude oil price has continued to ride on the recent news on COVID-19 vaccines. Investors are hopeful that the vaccination will get the world back to normal; which is positive for the bulls looking to trade oil. As at 09.07 GMT, Brent was up by 1.44% to trade at 48.50. Similarly, WTI continued past the $45 price level to trade at 45.42. Today, investors’ focus is on the U.S. crude oil inventories.    

Vaccine news continue to fuel hopes in the crude oil market

On 18th November 2020, Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) announced the completion of their coronavirus vaccine candidate’s phase 3 study. Two days later, the two companies applied for the approval of the drug’s emergency use. Once the U.S. Food and Drug Administration approves the submission on 10th December, vaccination within the United States will commence on the next day. 

The Moderna vaccine has also made considerable progress. Moncef Slaoui, the leader of Operation Warp Speed, has indicated that a committee of experts will hold a meeting on 17th December 2020 regarding this drug. Moderna is set to submit its application for the vaccine’s emergency use by the end of this month. 

Both the Moderna and Pfizer vaccines have a 95% effectiveness on preventing COVID-19. The vaccine by the University of Oxford has shown efficacy of 70%. However, researchers have indicated that the number could reach 90% with the adjustment of the dose.

The positive vaccine news has fueled optimism in the crude oil market. Investors are hopeful that the news will result in the easing of travel restrictions. Besides, people will go back to their usual working stations. These activities will increase the demand and price of crude oil.

Investors keep an eye on U.S. oil inventories

Earlier today, the American Petroleum Institute (API) released data on the inventories of crude oil, gasoline, and distillates stocks in the U.S. According to the data released by API on 18th November, U.S. crude oil inventories rose by 4.174 million barrels against the expected 1.950 million barrels. 

Today, the data shows that crude oil in storage has increased by 3.8 million barrels over the past week. Analysts had forecasted a change of -0.333 million barrels. 

Later in the day, the Energy Information Administration will release data on U.S. crude oil inventories. In the previous press release, the inventories have risen by 0.768 million barrels. Analysts expect the crude oil in storage to have increased by 0.127 million barrels over the past week. A higher-than-expected figure will imply low demand for the commodity; a scenario that will be bearish for the price of crude oil.  

Furthermore, the U.S. Baker Hughes oil rig count is due for release today. According to the figures presented on 20th November, the oil rig count in the U.S. stood at 231. The number is a decline from the previous 236. A high rig count will indicate increased demand for various oil products.