Crude futures settled at fresh nine-month highs Dec. 18 as the US moved closer to greenlighting a second COVID-19 vaccine.
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NYMEX January WTI settled 70 cents higher at $49.24/b, and ICE February Brent was up 76 cents at $52.26/b.
Front-month settled at the highest since Feb. 25, while front-month Brent was last stronger on Feb. 26.
NYMEX January RBOB settled 75 points higher at $1.3956/gal, and January ULSD was up 1.78 cents at $1.5130/b.
A US Food and Drug Administration advisory panel on Dec. 17 voted to approve Moderna's COVID-19 vaccine, paving the way for the agency to issue emergency authorization.
"Crude prices are rising again as Moderna's COVID vaccine is poised to get vaccine authorization from the FDA," OANDA senior market analyst Ed Moya said in a note. However, prices are likely to run into resistance at higher levels until the vaccine rollout becomes widespread, he added.
"Successful vaccine execution is what is needed to send WTI crude well above the $50 level and that is unlikely to happen for months," Moya said. "The virus spread across the US is going to test hospital capacity over a few states, and that should see lockdowns extended throughout the next couple of months."
Progress on the vaccine approval comes as Congress appears closer on passage of a $900 billion stimulus package that includes direct payments and expanded unemployment benefits. Lawmakers had said they intended to attach the relief bill to broader government funding bill due by midnight Dec. 18.
A total 885,000 people filed for unemployment benefits for the first time for the week ended Dec. 11, according to US Department of Labor data released Dec. 17, up 23,000 from the prior week and above market expectations of around 800,000.
The weaker-than-expected labor market data highlights the vulnerabilities in the US economic recovery but may in fact be somewhat supportive of oil prices, as it is likely to add pressure to congressional efforts to pass a stimulus package.
Still, gasoline cracks were trending lower amid near-term demand concerns. The front-month ICE New York Harbor RBOB crack against Brent fell to $6.11/b in afternoon trading Dec. 18, down from a close of $6.53/b the day prior.
Oil prices have also gleaned support from a weaker US Dollar. The ICE US Dollar Futures Index was trading at below 90 late Dec. 18, up slightly its Dec. 17 close but still at levels last seen in April 2018.