Oil Futures Notch 3rd Weekly Gain on Optimism over Vaccine


   
   WASHINGTON, D.C. (DTN) -- Oil futures nearest to delivery on the New York 
Mercantile Exchange and Brent crude on the Intercontinental Exchange settled 
Friday's session higher, with both crude benchmarks rising for the third week 
in a row as investors look towards future gains in global oil demand spurred by 
breakthrough development in two coronavirus vaccines that helped offset 
downbeat sentiment over rising coronavirus infections and stalled fiscal 
stimulus talks in Washington.

   U.S. pharmaceutical giant Pfizer and its German partner BioNtech on Friday 
formally requested Emergency Use Authorization for its BNT162b2 vaccine from 
the U.S. Food and Drug Administration. The authorization if approved would 
allow Pfizer to distribute 50 million doses as early as December before scaling 
up to 20 billion doses next year.

   Earlier this month, the company claimed its vaccine candidate proved to be 
95% effective in blocking the virus, lifting hopes for an accelerated recovery 
at some point next year. Most analysts warn however a genuine demand recovery 
might still be six to twelve months away, and without fiscal stimulus to bridge 
that gap the economy could take a sharp downturn.

   U.S. daily coronavirus cases continued higher this week, topping 185,000 
infections on Thursday, while deaths related to the virus surpassed a grim 
milestone of 250,000. Center of Disease Control warned the death toll from the 
virus could spike above 300,000 by mid-December, underscoring just how quickly 
the health crisis has deepened is in the United States.

   There are some signs the second wave of infections is now derailing the 
fragile economic recovery in the United States, with weekly unemployment claims 
increasing for the first time in six weeks and retail sales for October slowed 
below expectations to 0.3% from 1.9% a month prior. JPMorgan expects the U.S. 
economy to contract by 1% in the first quarter 2021 because of state and local 
lockdowns amid the second wave of infections.

   Adding to the uncertainty, Secretary of Treasury Steven Mnuchin this week 
requested the Federal Reserve return $455 billion in unspent COVID emergency 
funds which would shut down five emergency COVID-19 relief facilities, with the 
move opposed by Fed Chairman Jerome Powell.

   In March, Congress approved $2.2 trillion in emergency relief through the 
CARES Act, which included $500 billion to set up a variety of emergency lending 
facilities through the central bank to guarantee loans.

   Senate Leader Mitch McConnell on Friday proposed unused Federal Reserve 
funds to be put towards a targeted coronavirus relief bill, which would include 
a second round of small business aid. The situation remains fluid.

   NYMEX December West Texas Intermediate contract expired 41cts higher at 
$42.15 bbl, with the January contract settling at a 27cts premium to the 
expired contract at $42.42 bbl. ICE January Brent futures settled just below 
$45 bbl at $44.96 bbl, up 76cts. NYMEX December ULSD futures firmed 1.56cts to 
a fresh four-month spot high settlement at $1.2863 gallon, and December RBOB 
futures added 1.27cts to settle at $1.1752 gallon.

    

    

   Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, www.dtn.com.




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