LONDON: Oil hit its highest level since in March on Tuesday, rising toward $47 a barrel, as a third promising coronavirus vaccine spurred demand recovery hopes and US President-elect Joe Biden received the go-ahead to begin his transition.

AstraZeneca said on Monday its COVID-19 shot was 70 percent effective in trials and could be up to 90 percent effective, giving the fight against the pandemic a third vaccine. This follows positive results from Pfizer/BioNTech and Moderna.

Brent crude rose 45 cents, or 1 percent, to $46.51 a barrel in morning trade and hit a session high of $46.72, its highest since March 6. US West Texas Intermediate crude gained 47 cents, or 1.1 percent, to $43.53.

“The fight against the coronavirus is intensifying and is proving to be increasingly successful,” said Tamas Varga of broker PVM. “Next year’s oil demand estimates are bound to be amended upwards.”

This is Brent’s highest since the collapse of an earlier OPEC-led output pact, just as demand was starting to crater in March due to the developing pandemic, sent prices crashing.

Also supporting oil and wider financial markets, US President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s administration.

“In the short term, this is good for markets in general as well as for the oil market,” said Bjarne Schieldrop of SEB.

Expectations that US crude inventories edged lower last week also added support. The first of this week’s US supply reports is due from the American Petroleum Institute.

After the previous output pact collapsed, OPEC and allies agreed to record high output cuts to support prices.

OPEC+, as the group is known, is expected to roll over current cuts into 2021 at meetings on Nov. 30-Dec. 1, following technical talks this week.

Reuters