Oil may hit $50 over the next few months thanks to a moderate decline in global inventories that will accelerate by mid-2021, the chief executive of Vitol, Russell Hardy said as quoted by Reuters.

Oil prices have trended higher this week after Pfizer announced its vaccine candidate for Covid-19 had shown a 90-percent efficacy rate during late-stage trials. However, the sample of study participants the company looked at for this rate of efficacy is quite limited, at 92, to draw any major conclusions.

Still, the immediate and strong reaction of oil prices to the news shows just how important positive news about the pandemic has become amid surging cases, lockdowns, and a rising death toll.

Crude oil benchmarks added as much as 10 percent following the Pfizer news. Oil prices were also supported by a weakening U.S. dollar and Joe Biden’s victory in the U.S. election this weekend, which boosted the appetite for riskier assets and removed the election uncertainty from the market.

Further support for prices yesterday come from the Energy Minister of Saudi Arabia, Abdulaziz bin Salman, who said the OPEC+ production cut deal could be “tweaked”.

“We did tweak and I believe with consultation with our friends, some of them are present here and some of them are not, but I know how heartily they are committed to the principle of tweaking,” bin Salman said at the ADIPEC conference on Monday.

“I would go and argue it could be a tweak even beyond what the so-called analysts are talking about,” he added.

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Vitol’s Hardy’s remarks come after earlier this month he said he expected the second wave of Covid-19 infections to remove about half a million bpd in oil demand in Europe. Hardy said at the time he expected global demand to average some 96 million bpd during the winter.

By Irina Slav for Oilprice.com

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