Oil prices set for weekly gain amid coronavirus vaccine rollouts

Oil rose on Friday, adding to sharp gains overnight that saw Brent top $50 for the first time since March, as the rollout of coronavirus vaccination programmes fed hopes that demand for fuel would rebound up next year.

Brent was up 30 cents or 0.6 per cent at $50.55 a barrel by 1:22 pm IST, after gaining nearly 3 per cent on Thursday. US oil was up 31 cents, or 0.7 per cent, at $47.09 a barrel, having also risen almost 3 per cent in the previous session.

The benchmarks are set for a sixth consecutive week of gains as promising vaccine trials helped quell gloom over record increases in the number of new infections and deaths around the world in the coronavirus pandemic.

Britain began inoculations this week and the United States could start vaccinations as early as the coming weekend, while Canada on Wednesday approved its first vaccine with initial shots due from next week.

"Crude prices are surging in anticipation of the FDA's potential approval of Pfizer's vaccine, as Asia's economic recovery is making Chinese and Indian refiners acquire more oil," said Edward Moya, senior market analyst at OANDA.

Outside advisers for the US Food and Drug Administration have voted to endorse emergency use of Pfizer's vaccine, paving the way for the agency to authorise its use to inoculate a nation that has lost more than 285,000 lives to Covid-19.

A big jump in US crude stockpiles served as a reminder that there is still plenty of supply available, but was all but ignored as bulls ran through the market this week.

They were encouraged by signs that Asian demand is strong, with India's biggest refiner saying that it was operating at 100 per cent capacity of all its nine units for the first time since early this year.

"It seems the impending lockdowns across the U.S. and the potential hit to crude demand is being compensated by improving trends across Brazil, the UK, and most of Asia," said Moya.