Oil prices rose 1% on Tuesday, as investors kept their focus on the rollout of coronavirus vaccines, looking past tightening of lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand.
The United States began vaccinating people on Monday as the country's COVID-19 death toll crossed the 300,000 mark. Britain and Canada have also begun to administer shots.
"The crude market continues to seize upon the future outlook of the post-pandemic period, which could be as soon as next summer," said John Kilduff, partner at Again Capital in New York.
Still, the International Energy Agency on Tuesday said any impact of vaccines on demand is still several months away, while OPEC on Monday said oil demand will rise more slowly than expected.
Brent crude gained 43 cents, or 0.9% to $50.72 a barrel at 11:40 a.m. (EST 1640 GMT). U.S. West Texas Intermediate (WTI) crude rose 55 cents, or 1.2%, to $47.73.
Oil prices have recovered in the past few weeks, with Brent reaching $51.06 on Dec. 10, highest since March, supported by hopes of a recovery in demand, even as the infection rate has surged in most regions worldwide.
"There is a growing agreement between forecasting agencies that the improvement in global oil demand might not start at the beginning of next year but in the second half," said Tamas Varga of oil broker PVM.
London stepped up pandemic rules requiring bars and restaurants to close, Italy is considering more stringent steps over Christmas and Germany is likely to be under lockdown until early 2021.
The latest snapshots of U.S. oil supplies are expected to show a mixed picture, with gasoline and distillate stocks rising and crude inventories falling.
The first of this week's two U.S. inventory reports, from the American Petroleum Institute, is due at 4:30 p.m. EST (2130 GMT).
First Published: IST