Oil prices up $1/bbl on virus vaccine hopes, EU stimulus deal

NEW YORK: Oil prices rose about $1 to hit a more than four-month high on Tuesday, helped by a European Union stimulus deal and hopeful news about coronavirus vaccine trials.

Also supporting the market, US crude oil and refined products inventories likely fell last week, a Reuters poll showed.

Brent crude rose $1.02, or 2.4%, to $44.30 a barrel by 1:32 p.m. EDT (1732 GMT). West Texas Intermediate (WTI) gained 94 cents, or 2.3%, to $41.75 a barrel. Both benchmarks hit their highest since March 6 before easing in afternoon trade.

Prices were buoyed by an agreement among European Union leaders on a 750 billion euro ($859 billion) fund to prop up coronavirus-hit economies.

The EU deal allows the European Commission to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.

World shares and the euro also hit their highest in several months. The dollar, in which most oil contracts are priced, fell to its lowest since March against a basket of currencies.

Oil prices were supported by promising coronavirus vaccine data released on Monday, though a vaccine is still months away at best. Several different companies are testing new drugs for immunity to COVID-19.

"The EU stimulus deal and that apparent progress that continues to be made towards virus vaccine are both good for fuel demand," said Bob Yawger, director of energy futures at Mizuho.

Countries from the United States to India, meanwhile, are reporting record numbers of coronavirus infections and others, such as Spain and Australia, are battling new outbreaks.

American Petroleum Institute (API) data on US crude stockpiles is due at 4:30 p.m. EDT (2030 GMT), while Energy Information Administration (EIA) data is due on Wednesday morning.