Oil prices rose on Tuesday as high hopes that a COVID-19 vaccine could be on the horizon were enough to cancel out fears that fuel demand is set to weaken in the near term in coronavirus-hit countries in Europe and the United States.
U.S. West Texas Intermediate (WTI) crude CLc1 futures edged up 16 cents, or 0.4%, to $40.45 a barrel by 0805 GMT, while Brent crude LCOc1 futures rose 9 cents, or 0.2%, to $42.49.
Both benchmark contracts jumped 8% on Monday, in their biggest daily gains in more than five months, after drugmakers Pfizer PFE.N and BioNTech 22UAy.F said an experimental COVID-19 treatment was more than 90% effective based on initial trial results. Mass rollouts, however, are likely months away and subject to regulatory approvals.
“A viable vaccine is unequivocally game-changing for oil - a market where half of demand comes from moving people and things around,” JP Morgan said in a note.
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