Oil Rallies on Biden’s Transition to US Office & COVID-19 Vaccines
Oil was seen up Wednesday morning in Asia on the combination of Biden’s smooth transition to office and positive COVID-19 vaccine news - both signalling recovering demand.
Prior, the markets have been flood with concern that current president Donald Trump would continue his legal battles for the presidential spot. Luckily, the finally-achieved smooth transition is giving investors a much-needed breather on the front. News that former Federal Reserve Chair - Janet Yellen is Biden's Treasury Secretary nominee have additionally given the markets a boost.
“The fact that we have more certainty on what hopefully is an orderly transition is putting some wind in the sails for crude. The biggest issue ahead is how willing they’ll [U.S. Congress representatives] be to cross the aisle and enable a stimulus package to happen. That’s going to be a primary driver”, says Stewart Glickman - energy equity analyst at CFRA Research.
The anticipation of a COVID-19 vaccination program starting in December is also continuing to push oil higher, as markets look to future demand increases, further upped by the fact that now a third vaccine is on track to approval. Indeed, oil futures are already at heights not seen since March.
“By some time in the middle of next year, the economic environment should really move quite rapidly toward normalization, which ultimately means that demand for petroleum products should start to recover”, Bart Melek - head of global commodity strategy at TD Securities, comments.
Brent was seen up 1.19% to $48.35 by 4:22 AM GMT, while WTI saw a 1.11% increase to $45.41. Both Brent and WTI futures are now above the $45 mark for the first time since March.
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