Coronavirus vaccines are expected to boost international passenger transportation and oil consumption, but the first significant impact will not be felt until well into the second half of 2021, based on futures price movements on Monday.
Brent calendar spreads surged that day as traders priced in an announcement from Pfizer about successful immunisation trials, fuelling optimism an effective vaccine will become available within the next few months.
Before Pfizer’s announcement, flat prices and spreads had been under pressure since mid-October, prompting a statement from Saudi Arabia that OPEC and its partners are prepared to “tweak” their production agreement.
The combined effect of Pfizer’s announcement (potentially boosting oil consumption) and Saudi Arabia’s talk about tweaking (potentially reducing production relative to the planned baseline) sent oil futures soaring.
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