Oil settled up at a nine-month high on Friday, rounding out seven straight weeks of gains as investors focused on the rollout of COVID-19 vaccines and a decline this week in the U.S. dollar.
Pfizer has applied for approval in Japan for its vaccine, which is being used in the United Kingdom and the United States. U.S. Vice President Mike Pence said U.S. approval for Moderna’s shot could come later on Friday.
Brent crude settled up 76 cents, or 1.5%, to $52.26 a barrel after touching $52.48, its highest since March. U.S. West Texas Intermediate (WTI) crude settled up 74 cents, or 1.5%, to $49.10 after reaching $49.28, its highest since February.
The U.S. dollar rebounded slightly on Friday but stayed near 2-1/2-year lows reached a day earlier. A weak dollar makes oil and other commodities cheaper for buyers using other currencies.
U.S. lawmakers worked late to meet a deadline to agree on $900 billion in fresh relief for the pandemic-hit economy, but may instead may pass a third stopgap spending bill to keep the government from shutting down at midnight.
The dollar’s weekly decline “is a significant move down and is pushing the oil complex higher,” said John Kilduff, partner at Again Capital LLC in New York.
Oil gained support this week from weekly U.S. supply data showing crude inventories fell more than expected. [EIA/S]
The oil and gas rig count, an early indicator of future output, rose by eight to 346 in the week to Dec. 18, the highest since May, energy services firm Baker Hughes Co said in its closely followed report on Friday. [nL1N2IY1ZB]
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are supporting the market by slowing the pace of a planned increase in supplies next year.
OPEC+ plans to add 500,000 barrels per day of supply in January and will meet in early January to decide on next steps.