Oil prices gained more than 3% to hit a more than four-month high on Tuesday, helped by positive news about coronavirus vaccine trials and a European Union stimulus deal.Brent crude rose $1.39, or 3.2%, to $44.67 a barrel by 11:19 a.m. EDT (1519 GMT).
West Texas Intermediate (WTI) jumped $1.36, or 3.3%, to $42.17 a barrel. Both benchmarks were at their strongest since March 6.Prices were buoyed by an agreement among European Union leaders on a 750 billion euro ($859 billion) fund to prop up their coronavirus-hit economies, lifting prospects for fuel demand.
“The stimulus that we got out of Europe really seems to have set the stage for the energy rally,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “The expectation is if they can get this through all the individual governments and the approval process there is going to be a surge of oil demand.
“In other financial markets, world shares and the euro also hit their highest in several months on Tuesday.The dollar, in which most oil contracts are priced, fell to its lowest since March against a basket of currencies.
The EU deal allows the European Commission to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.Oil prices were also supported by promising coronavirus vaccine data released on Monday.
Countries from the United States to India, meanwhile, are reporting record numbers of coronavirus infections and others, such as Spain and Australia, are battling new outbreaks.
U.S. crude oil and refined products inventories likely fell last week, a preliminary Reuters poll showed on Monday.Industry-compiled U.S. crude stockpile data is due at 4:30 p.m. EDT (2030 GMT), while government data is due on Wednesday morning.