Oil in London jumped by the most since June as Pfizer Inc. reported a potential Covid-19 vaccine breakthrough.
Crude futures spiked following news the vaccine, being developed by Pfizer and BioNTech SE, prevented more than 90% of infections in a study of tens of thousands of volunteers.
Markets globally surged. WTI climbed almost 10% in New York, while global equities soared.
It also led to broader strength in the oil futures curve, with timespreads also seeing some of their biggest moves higher in months.
“That could be the potential game changer as it will speed up the demand recovery,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.
Prices had earlier gained as Joe Biden declared victory in the U.S. presidential election and began preparations to navigate America’s pandemic-hit economy out of crisis, with potential shifts coming on a range of policies from fiscal stimulus to Iranian sanctions.
Saudi Arabia said that OPEC+ could extend oil cuts through 2022 as the group seeks to re-balance the glutted market.
- West Texas Intermediate for December delivery jumped as much as 9.9% to trade at $40.82; the U.S. benchmark was trading up 8.7% at $40.38 by 7:46 a.m. local time
- Brent for January settlement rose 7.9% to $42.56
The potential vaccine would come just as European oil demand is being roiled by Covid-19 again.
Speculators had built up bumper short positions in the market in recent weeks as the virus spread afresh, though consumption has been relatively robust in China.