Oil prices rose early on Monday after the U.S. FDA approved the Pfizer-BioNTech vaccine for emergency use and shipments of batches of vaccine vials began this weekend, with first vaccinations expected as early as on Monday.  

As of 9:04 a.m. ET today, WTI Crude prices had gained 1.67 percent at $47.34, and Brent Crude was trading at above the $50 a barrel mark, at $50.69, up by 1.48 percent on the day.  

Last Thursday, Brent Crude hit $50 a barrel for the first time since oil prices had crashed in early March, as hopes of swifter-than-thought vaccine rollout fueled bullish expectations of strengthening oil demand early next year.

The U.S. approval of the Pfizer-BioNTech vaccine further strengthened bullish sentiment on Monday that fuel demand could rise with mass vaccination. The U.S. Food and Drug Administration (FDA) issued on Friday the first emergency use authorization for a vaccine against COVID-19. The authorization allowed the vaccine to be distributed in the United States.

Distribution began on Sunday, while vaccine shots will be given to health care workers and nursing home residents as early as of today.

The vaccine rollout in the world’s biggest petroleum consumer, the United States, supported oil prices as the market hopes that despite the current heavy toll of COVID-19 infections, hospitalization rates, and deaths, vaccines could accelerate the recovery of fuel demand.

Early on Monday, oil prices were also supported by news of an explosion of an oil tanker offshore Saudi Arabia, in an apparent attack on a Singapore-flagged vessel near Jeddah.  

“Oil is increasingly being viewed as the cheapest of all reflation assets and with this in mind, the prospect for increased investor appetite, together with a recovery in demand, could propel prices higher in 2021,” John Hardy, Head of FX Strategy at Saxo Bank, said on Monday.  

By Tsvetana Paraskova for Oilprice.com

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