Meanwhile, Chevron buys Noble for $5 billion: File Image/Pixabay
Multiple reports that a Covid vaccine breakthrough has been achieved, along with the possibility of a European Union fund to revive economies in the wake of government-imposed lockdowns, kept worries of escalating infection rates at bay and led to another round of modest gains for crude on Monday.
Brent settled up 14 cents at $43.28 per barrel, while West Texas Intermediate rose 22 cents to $40.81.
But as always, crude analysts continued to be influenced by mainstream news headlines that focus almost exclusively on U.S. infection rates: "As things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down," said Bjornar Tonhaugen, head of oil markets at Rystad Energy, adding that "Even though in Europe the virus has been cornered, the Americas and some Asia states still have a long way to go."
Fawad Razaqzada, market analyst, ThinkMarkets
A potentially sharp move could be on the cards soon.
Still, those eyeing the continued economic recovery across the globe in the wake of the pandemic shutdowns think the crude market will deliver welcomne surprises sooner than later.
Fawad Razaqzada, market analyst with ThinkMarkets, said, "Over the past few weeks, crude oil prices have actually been uncharacteristically quiet, suggesting a potentially sharp move could be on the cards soon.
"If the recovery in demand turns out to be quicker and more robust than expected, the supply surplus could diminish fast given the ongoing supply restrictions by the OPEC+ group; this should mean higher oil prices, everything else being equal."
Meanwhile, despite the unprecedented devastation the lockdowns caused to oil producers, they too are mobilizing to solidify their standing: Chevron Corp. on Monday announced it would buy oil and gas producer Noble Energy Inc. for about $5 billion in stock, the first big energy deal since the lockdowns crushed fuel demand.
The purchase boosts Chevron's investments in U.S. shale and in natural gas with Noble's Leviathan field in Israel.
Monday's crude gains came on the heels of the Food and Drug Administration expressing optimism over Oxford University and AstraZeneca's coronavirus vaccine showing "robust" immune system responses in clinical trials and also causing a reaction in the body's T-cells, which help to fight off the virus - with no serious side effects.