This year has proven to be anything but normal, especially within the oil Industry. COVID-19 has certainly dampened oil demand throughout the world since March, but light is showing at the end of the tunnel. In just the past week we have had two highly effective vaccine candidates prove that our brilliant scientists may get us and oil demand back to “normal” by the end of 2021.
Last Monday pharmaceutical giant Pfizer Inc. and BioNTech SE released results from a clinical study that shows its experimental vaccine is 90% effective of symptomatic infections in a large-scale study. Earlier this morning, Moderna released results from its test trial that proved its vaccine is 94.5% effective. Both these vaccine candidates, which still need to be approved by the FDA, could help recover the slump in the oil industry since early March. December WTI oil futures have traded between $25 and $48 a barrel during the pandemic, with prices just below $60 a barrel before it started.
“Oil is rallying like a mad thing, joining the dots between a potential vaccine and a rebound in global demand growth,” said Matt Smith, director of commodity research at ClipperData.
Demand could be slow to recover to the pre-virus levels with a vaccine; however, predictions are that the oil industry will slowly recover back to normal as early as the middle of 2021. The question remains, will the oil producers maintain their discipline and continue to hold back on production even as the outlook gets brighter.