Oil Futures Notch 3rd Weekly Gain on Optimism over Vaccine
11/20 3:58 PM
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. (c) Copyright 2020 DTN, LLC. All rights reserved.
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