By Barani Krishnan
Investing.com - Oil gained as much as 3% Monday after Moderna’s report on the progress in its Covid-19 vaccine triggered a rash of exuberance across markets as investors reacted for the second time in a week to the prospect of life returning to pre-pandemic levels.
Moderna (NASDAQ:MRNA) Inc said its experimental vaccine was 94.5% effective in preventing COVID-19. Its update comes after Pfizer (NYSE:PFE) said last Monday that its own vaccine for blocking the virus was more than 90% effective. Wall Street’s Dow gained 1.6% at the height of the market’s reaction to the Moderna news, boosting most risk assets, including oil.
New York-traded West Texas Intermediate, the leading indicator for U.S. crude, settled up $1.21, or 3%, at $41.34 per barrel, after crossing $42 at one point.
London’s Brent, the global benchmark for oil, finished the session up $1.04, or 2.4%, at $43.82, after an intraday high of $44.64.
“On paper, it looks like Moderna won the vaccine race, a slightly more effective rate than Pfizer’s and much easier to store,” Ed Moya, analyst at New York’s OANDA, said, referring to the more regular refrigeration required for the Moderna product versus the -90 Fahrenheit needed for what Pfizer has developed.
Despite Monday’s rally, some analysts have pointed to the seasonal rise in crude stockpiles and other factors that could weigh on oil.
Both WTI and Brent gained 8% last week, most of it from Pfizer’s update last Monday on the progress of its Covid-19 vaccine trials.
“The short-term headaches for the crude demand outlook, however, remain firmly in place,” Moya said. “COVID new cases, hospitalizations, and deaths are still trending higher."