US oil prices fell in early trade on Tuesday due to near-term demand concerns which outweighed hopes for a COVID-19 vaccine. US WTI crude CLc1 futures lost 81 cents (2%) to $39.48/barrel at 0029 GMT. The US benchmark jumped 8% on Monday after drugmakers BioNTech and Pfizer reported 90% effectiveness of an experimental COVID-19 treatment. An available vaccine would be a game-changer for the oil market, JP Morgan said in a note. However, the current supply and demand imbalances must go before prices could rise.
Analysts said that reimposed lockdowns in some European countries could cut global oil demand by another 1 million bpd at the end of the year. Meanwhile, a vaccine would need more tests for several months before being available. A vaccine is not also expected to prevent some US states from returning to lockdown this autumn or winter, the analysts said. Early Tuesday’s decline was tempered after Saudi Arabia’s energy minister says OPEC+ is ready to cut more output if demand plunges before the vaccine is available.
