U.S. West Texas Intermediate crude oil futures are edging higher on Friday as investors showed no signs of lightening up on the long side ahead of the weekend and next week’s holiday-shortened week.
The market is currently trading at its highest level since March 3 as traders shrugged off negative future demand news throughout the week and instead focused on the optimism created by the rollout of the coronavirus vaccines and hopes for a new fiscal stimulus deal. A weaker U.S. Dollar, which fell to more than a 2-1/2 year low also drove up demand for the dollar-denominated commodity.
Vaccination Campaign Kicks-Off, but Pandemic Concerns Linger
The United States kicked off its vaccination campaign against COVID-19, buoying hopes that pandemic restrictions could end soon and lift demand at the world’s largest oil consumer.
Major European countries continued in lockdown mode to curb the spread of COVID-19 which has reduced fuel demand. For example, Germany, the fourth-largest economy in the world, plans to impose stricter lockdowns from Wednesday to battle the virus.
“While the market has been buoyed by the rollout of COVID-19 vaccines, a path towards normalization of demand remains a difficult one,” ANZ analysts said in a note.
More than 73.65 million people have been reported to be infected by the coronavirus globally and 1,654,920 have died, according to a Reuters tally on Friday.