Against all odds, recent price action revealed Brent crude prices broke the key resistance level of $45, $46, $47, and at today’s trading session in London; it smashed the critical resistance level of $48/barrel.

Prevailing market sentiments reveals Astra Zeneca Covid-19 vaccine is rated highly effective in taming the virus thus adding to positive news from Pfizer and Moderna that such drugs had what it took to stop COVID-19 attacks.

Oil traders are further riding the bandwagon fast on the latest geopolitical reports showing that the world’s most important economy will have a smooth transition of power amid reports stating U.S President Joe Biden, as selected Wall Street favorite Janet Yellen to lead the U.S Treasury, thereby kept the oil bears on the bench arbitrarily sulking.

Although recent data retrieved from the American Petroleum Institute revealed a 3.8-million-barrel gain in crude oil stockpiles for the week ending November 20., as energy experts had early anticipated a drop of 0.333 million barrels, such bad news wasn’t enough to spoil the bulls party taking to account that oil traders remain more concerned on the COVID-19 menace coming to play.

As such Oil bulls are now hoping that such macros coming from COVID-19 vaccines effectiveness will support crude oil prices, on the basis that a process of normalization in global economic activity might kick up faster than the IMF report had earlier anticipated.

That said, oil traders are also expecting major oil players that include the Saudis and Russians in extending the current phase of oil production cuts by at least 3 months coupled with enforcing its compliance strategy to keeping oil prices from tanking lower momentarily.

It’s fair to say, Brent crude prices might touch the $50/barrel band in the near term, as major institutional investors, banks have little options now but to reverse their bearish oil bets momentarily as the overpowering bullish narrative around COVID-19 vaccines says those bearish bets are flat out wrong.

This article was originally posted on FX Empire

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