Oil prices surged early on Tuesday to their highest level since Saudi Arabia and Russia broke up the OPEC+ pact in early March, thanks to promising results in a coronavirus vaccine trial and the European Union reaching a historic stimulus package deal after five days of marathon talks.
As of 10:37 a.m. EDT on Tuesday, WTI Crude prices were surging by 3.41 percent at $42.20, while Brent Crude prices were rising by 3.28 percent on the day to $44.69.
Both benchmarks reached their highest levels since March 6 this year, when the leaders of the OPEC+ pact, Saudi Arabia and Russia, failed to reach a deal on how to manage oil supply to the market that had started to show worrying signs that the pandemic would wipe out a lot of demand as lockdowns started in Europe.
On Tuesday, oil prices reacted positively to the news from Monday that a Phase 1 trial of a vaccine being developed by the University of Oxford showed that the vaccine raised no safety concerns, did not lead to any unexpected symptoms in those who received it, and was very similar to other vaccines of this type.
With surging coronavirus cases in many countries, including the United States, and fears that a second COVID-19 wave could prompt new localized lockdowns, the markets welcomed the vaccine development news.
Oil prices were also supported by the deal of a massive economic stimulus package that the European Union (EU) leaders finally clinched after five days of intense negotiations and disagreements over how much and under what conditions member states would get loans and/or grants for economic recovery.
The next immediate catalyst for oil prices will come from the industry estimates of U.S. commercial oil inventories due to be released by the American Petroleum Institute (API) later on Tuesday.