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Oil prices rally for 6 weeks, longest streak since June

Oil prices are staying on course on the bias that the world’s largest economy has begun the vaccination campaign against COVID-19

Oil prices kept their cool at the start of trading for the week. Crude oil prices are back above $50 a barrel, buoyed by hopes that a rollout of COVID-19 vaccines would support global energy demand.

Oil prices have rallied for six consecutive weeks, their longest streak of gains since June.

  • At the time of writing this report, Brent crude futures were up by 0.2%, to trade at $50.05 a barrel.
  • While, U.S. West Texas Intermediate crude futures gained 0.1%, to trade at $46.61 a barrel.

What they are saying

Stephen Innes, Chief Global Market Strategist at Axi, spoke on the critical fundamentals keeping oil prices supported at least for the near term, and most importantly, on how COVID-19 vaccines had triggered the recent rally prevailing in the crude oil market.

“Last week was a significant inflexion point for oil markets. Brent breaks $50 for the first time since early March, reflecting continued momentum as the market was adjusting for this past weekend’s FDA emergency vaccine approval and the demand recovery into 2021. The oil markets are trading up this morning as the FDA approves the vaccine’s emergency rollout; Brexit discussions endure suggesting no immediate global risk reset, and it appears vaccine supply constraints will be overcome quickly.”

What this means: Oil prices are staying on course on the bias that the world’s largest economy has begun the vaccination campaign against COVID-19, buoying hopes that pandemic restrictions could end soon and lift demand at the world’s largest oil consumer.

What to expect: The crude oil market had been well supported by crude oil bulls when it dropped at its trading session lows. Still, oil bears line up as we near Brent $51, perhaps banking on year-end volatility as the JMMC becomes increasingly in the market’s focus, where oil price support may hinge on an OPEC + decision on whether or not to open up oil spigots a bit more freely.

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