Crude oil demand is likely to rebound next year following the promising news about a vaccine against the novel coronavirus, according to Fitch Ratings.

In its latest Global Commodities Strategy report, the ratings agency noted the strong chances of a Covid-19 vaccine getting emergency approval soon as a major factor for the recovery in global oil demand.

Fitch also noted plans by OPEC+ to extend its oil production control deal at current restriction levels. Initial plans by the cartel called for a cut of some 7.7 million bpd until the end of 2020, followed by a relaxation of the restrictions by about 2 million bpd beginning in January 2021.

However, prices have remained depressed because of the resurgence in Covid-19 cases in Europe and the United States, which prompted discussions of extending the current cuts and even the suggestion of deepening them again.

“We maintain a bullish view into 2021, based on the core assumption of a rollout of an effective vaccine in the second half of 2021 and a broader global economic recovery supporting a return in oil demand,” Fitch analysts said, noting, however, that the lockdowns in Europe and some U.S. states will limit the upside potential for crude oil prices.

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For next year, Fitch expects Brent crude to average $48 a barrel, rising to $50 a barrel in 2022. That’s a downward revision from an earlier forecast that saw Brent crude averaging $51 a barrel next year, rising to $53 a barrel in 2022.

Oil prices jumped by 10 percent last week, after Pfizer announced potentially promising efficacy results for its vaccine candidate. The benchmarks rose again this week following a similar announcement by Moderna, which reignited hopes of a vaccine soon to be available. However, analysts have warned that even if a vaccine is approved under an emergency procedure, it will take months for it to be distributed widely enough for mass vaccinations.

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By Charles Kennedy for Oilprice.com

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