Oil prices rocketed higher after Pfizer (NYSE:PFE) and partner BioNtech (NASDAQ:BNTX) said that their vaccine against COVID-19 was strongly effective, exceeding expectations with results that are likely to be met with cautious excitement — and relief — in the face of the global pandemic.
The vaccine is the first to be tested in the United States to generate late-stage data. The companies said an initial analysis of the results showed that individuals who received two vaccine injections three weeks apart experienced more than 90% fewer cases of symptomatic COVID-19 than those who received a placebo. The news changed the fundamentals of oil fretting more COVID-19 shutdowns and now may have to worry about insufficient supply.
This warning is coming from the Saudi Energy Minister Prince Abdulaziz who says the cost of maintaining oil capacity is high and warns of a possible supply crunch if the current market situation continues. He is warning that future oil supply may not keep up with economic growth and that he sees a potential or a supply capacity crunch and bottlenecks in the midstream sector. This is in line with what we have been thinking regarding CAPEX cuts and refinery closures.
Oil is up even as Libyan oil production exceeds 1.0 million barrels of oil per day. Maybe that is because the OPEC cartel is sending signals to adjust output to allow for Libya to recover. Now with the possibility of an end game with COVID and a soaring stock market, the low for oil this year should be in.