A third major Covid vaccine breakthrough in as many weeks caused oil prices to once again rise on Monday, this time by over 2 percent, with traders now anticipating a meaningful demand recovery ahead.
West Texas Intermediate was down 9 cents, or 0.2%, at $41.65 a barrel by 0039 GMT, after dropping around 0.2% on Thursday.
The worldwide benchmark for oil prices, Brent Crude futures, were up 0.1% to $46.09 a barrel on Tuesday after closing 2% higher on the previous day and 5% in the previous week. Both oil benchmarks settled up about 2 percent on Monday after gaining about 5 percent last week.
Find all updates with Moneycontrol's COVID-19 Vaccine Tracker here.More news: Elon Musk Becomes Second Richest Person In The World; Overtakes Bill Gates
"Despite the fact that in reality it will take time for a global vaccine campaign to be implemented, time during which oil demand will suffer, positive news are breaking daily about the vaccine deliveries", said Bjornar Tonhaugen, Rystad Energy's head of oil markets.
Also hopes in the market was that OPEC, Russia, and other producers will keep crude output in check.
"Oil prices are consolidating near three-month highs after a third successful coronavirus vaccine trial, better-than-expected flash PMI readings across Europe and the USA", said Edward Moya, senior market analyst at OANDA. The group, known as OPEC+, were expected to delay a planned production increase from January 1.
On the supply front, OPEC+ will discuss its "output policy" during the ministers meet on 30 November and 1 December.More news: Biden To Nominate Former Fed Chair Janet Yellen For Treasury Secretary
"An assumed roll-over of current cuts by OPEC+ to Q1 2021 is probably in today's price of $44 per barrel", Nordic bank SEB said.
Smaller Russian oil companies are still planning to pump more crude this year, a group representing the producers said.
Uncertainties surrounding USA post-election disputes also started clearing after President Donald Trump on Monday allowed officials to proceed with a transition to President-elect Joe Biden, giving his rival access to briefings and funding even as he vowed to persist with efforts to fight the election results.
Oversupply concerns, however, continue to weigh as Libya has raised production to pre-blockade levels of 1.25 million bpd.More news: Square Enix to release Tomb Raider Reloaded for mobile devices in 2021