- Oil futures gained to their highest since September 1 on Monday after AstraZeneca announced its coronavirus vaccine was 70% effective at protecting against COVID-19.
- The shot – developed in partnership with the University of Oxford – showed 90% and 62% effectiveness across two different dosing regimens. It joins Moderna and Pfizer and BioNTech’s promising candidates.
- The news spurred new optimism for a swift economic recovery and stronger oil demand. West Texas Intermediate crude futures gained as much as 2.2%, to $43.36 per barrel.
- Brent crude, oil’s international benchmark, rose 2.5%, to $46.07 per barrel, at intraday highs.
- Watch oil futures trade live here.
Crude oil climbed to its highest price since September 1 on Monday after AstraZeneca announced an encouraging update to the development of its coronavirus vaccine.
The pharmaceutical giant said its shot – made in collaboration with the University of Oxford – was 70% effective at preventing COVID-19 in a trial of more than 20,000 volunteers. The success rate combines data from two dosing regimens that showed 90% effectiveness and 62% effectiveness. The company now plans to submit data for regulatory approval around the world, according to a press release.
The news lifted oil prices as traders grew more optimistic toward a near-term demand rebound. West Texas Intermediate crude futures gained as much as 2.2% on the news, to $43.36 per barrel. Brent crude, oil’s international benchmark, rose 2.5%, to $46.07 per barrel, at intraday highs.
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AstraZeneca’s vaccine progress marks the third positive announcement from companies rushing to bring a viable drug to market. Moderna and Pfizer and BioNTech revealed in recent weeks that their own candidates were 95% effective at protecting against COVID-19. Pfizer applied for emergency-use authorization from the US Food and Drug Administration on Friday, teeing its shot up for distribution in early 2021.
The updates have lifted crude prices throughout the month as investors bet on the vaccines to spur a bounce-back in travel activity. The commodity makes up part of the so-called reopening trade, in which airlines, cruises, hotels, and other industries hit hardest by lockdowns gain on new hopes for a complete economic recovery.
Still, prospects for a vaccine-fueled rebound continue to butt heads with the third wave of coronavirus infections. The US recorded 150,098 new COVID-19 cases on Sunday, according to The COVID Tracking Project. Deaths neared 250,000, and hospitalizations rose to 83,870.
The uptick in cases and dwindling supply of hospital beds threaten to disrupt the nation’s recovery before vaccines win regulatory approval. Several states have reintroduced restrictions to slow the virus’s spread, leading some economists to lower growth estimates.
Goldman Sachs cut its fourth-quarter GDP projection to 3.5% from 4.5% on Monday, citing the “rapid and broad-based resurgence of the coronavirus” for its gloomier outlook. The bank’s economists also lowered their first-quarter estimate to 1% growth from 3.5%.
WTI crude traded at $42.89 as of 8:25 a.m. ET, down 30% year-to-date.
Brent crude traded at $45.58, down 35% year-to-date.
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