Oil prices were little changed overnight as coronavirus cases increased in many countries, though a flurry of announcements about a potential COVID-19 vaccine and ongoing talks over a European Union fund to revive economies hit by the pandemic curbed losses.
Brent crude settled up 14 US cents, or 0.3 per cent, at $US43.28 per barrel, while US West Texas Intermediate (WTI) rose 22 US cents, 0.5 per cent, to $US40.81.
“As things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.
“Even though in Europe the virus has been cornered, the Americas and some Asian states still have a long way to go.”
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
Prices found support after three groups said their potential vaccines showed promising results.
An experimental coronavirus vaccine being developed by AstraZeneca and Britain’s University of Oxford was safe and produced an immune response in early-stage clinical trials, data showed, keeping alive the hope it could be in use by the end of the year.
More than 150 possible vaccines are in various stages of development with US drugmaker Pfizer and China’s CanSino Biologics also reporting positive responses for their candidates on Monday.
Investors are also looking to the EU summit for trading cues, with leaders showing the first signs of compromise over carving up a proposed 750 billion euro ($US858.3 billion) recovery fund to revive economies.
“Over the past few weeks, crude oil prices have actually been uncharacteristically quiet, suggesting a potentially sharp move could be on the cards soon,” said Fawad Razaqzada, market analyst with ThinkMarkets.
“If the recovery in demand turns out to be quicker and more robust than expected, the supply surplus could diminish fast given the ongoing supply restrictions by the OPEC+ group. This should mean higher oil prices, everything else being equal.”
While fuel demand has recovered from a 30 per cent drop in April after many countries imposed strict lockdowns, usage is still below pre-pandemic levels. US retail gasoline demand is falling again as infections rise.
Rising tension between China and the United States also put pressure on prices.
China’s embassy in Myanmar on Sunday accused the United States of “outrageously smearing” the country and driving a wedge between it and its Southeast Asian neighbours over the contested South China Sea and Hong Kong.
Saudi Arabia’s 84-year-old ruler, King Salman bin Abdulaziz, has been admitted to hospital, suffering from inflammation of the gall bladder. The king has ruled the world’s largest crude oil exporter and close US ally since 2015.