Oil rises as vaccine optimism sustains rally despite stockpile gain

Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices edged higher for the fourth straight session on Wednesday as the market shrugged off an industry report showing U.S. crude stockpiles rose more than expected, extending a rally driven by hopes that a COVID-19 vaccine will boost fuel demand.

Brent crude was up 50 cents, or 1.04%, at $48.36 a barrel by 0803 GMT, having risen almost in the previous session. West Texas Intermediate crude gained 37 cents, or 0.82%, to $45.28, after rising more than 4% on Tuesday.

Both contracts are at their highest since early March and have rallied around 9% in the last four days.

“With an orderly Presidential transition in sight, vaccine boosters and expectations that OPEC+ will extend production cuts next week, oil markets completely ignored the unexpected 3.8 million-barrel climb in API U.S. crude inventories,” Jeffrey Halley, senior market analyst at OANDA, told Reuters.

AstraZeneca said on Monday that its coronavirus vaccine was 70% effective in trials and could be up to 90% effective, providing another weapon in the fight to contain the pandemic after positive results from other major pharmaceutical developers.

In the United States, President Donald Trump’s administration gave President-elect Joe Biden access to resources enabling him to take over in January after an extended delay despite Trump’s loss in the Nov. 3 election.

The American Petroleum Institute (API), an industry association, said on Tuesday that U.S. crude stocks rose by 3.8 million barrels in the week to Nov. 20 to around 490 million barrels.

Official U.S. government crude inventory data will be released later on Wednesday.

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