Oil prices rise amid full vaccine approval and Mexico output cuts

Oil prices rose 3% on Tuesday amid first full approval given to a COVID-19 vaccine by U.S. regulators and oil output cuts in Mexico due to a fire on an oil platform.

Brent crude oil futures were up $2.13, or 3.1%, at $70.88 a barrel while U.S. West Texas Intermediate rose $1.92, or 2.9%, to $67.54.

Both benchmarks, last week, posted biggest weekly losses in more than nine months. On account of a weaker dollar, though, the benchmarks jumped more than 5% on Monday.

The rise in oil prices comes at a time when the U.S. Food and Drug Administration (FDA) issued full approval for the Pfizer/BioNTech two-dose vaccine on Monday. The vaccine was authorized for emergency use last December.

The success by China in controlling the spread of Delta variant has also boosted vaccine demand sentiment as no cases of locally transmitted infections were reported recently, said analysts.

Another reason for the rise in prices is the fire on an oil platform operated by Mexico on Sunday. Oil production was reduced by 421,000 barrels per day of production and five workers lost their lives.

On Monday, the U.S. Department of Energy said up to 20 million barrels of crude from the Strategic Petroleum Reserve (SPR) oil stocks will be sold to comply with legislation. Deliveries will take place between October 1 and December 15.

The Indian refiner’s crude throughput surged in July to its highest in three months due to increase in fuel demand.

(With inputs from Reuters)

Picture Credits: Reuters