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 futures edged up 16 cents, or 0.4%, to $40.45 a barrel by 0805 GMT, while Brent crude 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 and BioNTech 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.
U.S. oil inventory numbers are due on Tuesday from the American Petroleum Institute, and on Wednesday from the Energy Information Administration. Five analysts polled by Reuters estimated, on average, that U.S. crude stockpiles fell by 1.3 million barrels in the week to Nov. 6.
Tuesday’s oil price decline was tempered by comments from Saudi Arabia’s energy minister, who said on Monday the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, could tweak their supply cut pact if demand slumps before the vaccine is available. OPEC+ agreed to cut supply by 7.7 million barrels per day from August through December and then ease the cut to 5.7 million bpd from January.