Oil prices surge 10% on COVID vaccine hope

Oil prices soared by 10 percent and WTI Crude topped $40 a barrel on Monday morning, after vaccine developers announced 90-percent efficacy of a COVID-19 vaccine candidate, instilling hopes on the markets that life could soon return to normal.

As of 9:38 a.m. ET, WTI Crude prices were surging by 10.37% at $40.92 and Brent Crude was soaring by 9.02% on the day, at $43.01.

Oil jumped and followed other markets globally on Monday after Pfizer and BioNTech said that their mRNA-based vaccine candidate, BNT162b2, against SARS-CoV-2 demonstrated evidence of efficacy against COVID-19 in participants without prior evidence of SARS-CoV-2 infection.

The vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis, the companies said. Pfizer and BioNTech plan to file for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration (FDA) soon after the required safety milestone is achieved, which is currently expected to occur in the third week of November.

After months of setbacks on vaccine development by pharmaceutical companies, the markets, including the oil market, cheered the news of the effective vaccine candidate, hoping that a vaccine could soon allow a return to pre-coronavirus way of life and travel.

Oil prices were also supported by a weakening U.S. dollar and Joe Biden’s victory in the U.S. election this weekend, which boosted appetite for riskier assets and removed the election uncertainty from the market.

Saudi Arabia also jawboned oil prices higher earlier on Monday as Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said that the current deal could be tweaked, in the clearest signal that OPEC+ is seriously considering such a move.

“I would go and argue it could be a tweak even beyond what the so-called analysts are talking about,” Prince Abdulaziz bin Salman told the ADIPEC conference, as carried by Reuters.