Oil futures extended gains Monday, trading solidly higher after Moderna Inc. said its vaccine candidate was highly effective in preventing new COVID-19 infections.
West Texas Intermediate crude for December delivery jumped $1.69, or 4.2%, to $41.82 a barrel on the New York Mercantile Exchange. January Brent crude, the global benchmark, was up $1.69, or 4%, at $44.47 a barrel on ICE Futures Europe.
Oil extended gains after Moderna said its vaccine candidate prevented 94.5% of infections in a late-stage trial. The progress comes a week after Pfizer Inc. and BioNTech SE said their vaccine candidate was more than 90% effective.
When judging the economic recovery, “particularly through the lens of oil markets from planes, trains and automobiles actively moving from point A to B, with multiple high efficacy vaccines in the pipeline, there is good chance mobility will absolutely return to pre-pandemic levels,” said Stephen Innes, chief global market strategist at Axi, in a note.
Crude was trading higher ahead of the Moderna announcement, with support tied to upbeat data out of Asia, including a 6.9% rise in October Chinese factory output year over year. Retail sales gained 4.3% over a year ago, up 1 percentage point from the previous month. Investment in factories and other fixed assets rose 1.8% in the first 10 months of 2020, up 1 percentage point from the first nine months.
Traders are also awaiting a meeting this week of the Joint Ministerial Monitoring Committee that tracks output curbs by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+.
“The committee may make a recommendation, but we will have to wait until the full OPEC+ meeting” on Nov. 30-Dec. 1 for a final decision, said Warren Patterson, head of commodities strategy at ING, in a note.
“We are still of the view that OPEC+ will need to extend current cuts of 7.7 [million barrels a day] by at least another three months, in order to ensure that the market draws down inventories over the first quarter of next year,” he said.