•New price portends higher cost of petrol
Emmanuel Addeh with agency report
Brent crude hit $50 a barrel yesterday, for the first time since oil prices crashed in early March, as hopes of swifter-than-thought vaccine rollout fuelled bullish expectations of strengthening demand early next year.
It reached the $50-price-a-barrel threshold for the first time since the first days in March, when Saudi Arabia and Russia broke up the previous OPEC+ pact, contributing to massive slides in oil prices exacerbated by the demand crash in the lockdowns in the spring.
Oil Price.Com reported that the WTI crude price also hit its highest level since the price crash and traded at $47.23, up by 3.82 per cent on the day.
The prices were boosted by Canada approving the Pfizer-BioNTech vaccine, joining the UK, the online medium reported.
Canada’s health authorities approved on Wednesday the vaccine, and the first doses of the vaccine are expected by the end of this year.
The UK has already started vaccinating vulnerable people and essential personnel and the first person in the UK received the Pfizer vaccine on Tuesday.
Hopes of faster-than-expected vaccine releases turned the oil market sentiment bullish even after the EIA reported on Wednesday a massive crude oil inventory build of 15.189 million barrels for the week to December 4.
This rise in crude inventories came close to the largest crude build ever, which was recorded earlier this year for the week ending April 10, when the EIA reported a 19.25 million barrel inventory build.
The market was already ignoring the massive build last week due to the vaccine hopes and signs that oil demand in Asia continues to recover and be a bright spot on the market.
Indian Oil Corp, the biggest refiner in the world’s third-largest oil importer, said its refineries operated at 100-per cent capacity in November, for the first time since the pandemic started, in order to meet growing domestic fuel demand.
The rise in the price of the commodity is both good and not-so-good news for Nigeria, which on one hand is expected to earn more dollar revenue for the month, while the pump price of petrol, which the government says is now determined by market forces, will likely jump in January.