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  • Crude oil prices are rising after posting losses on Thursday and Friday.
  • Upbeat market mood seems to be helping risk-sensitive oil find demand.
  • Goldman Sachs analysts see oil market recovery picking up steam in 2021.

After spending the second half of the previous week under modest bearish pressure, crude oil prices started the new week on a strong footing. As of writing, the barrel of West Texas Intermediate (WTI) was trading near $43.50, gaining 1.25% on a daily basis.

Oil gains traction on demand outlook

Heightened coronavirus vaccine hopes seem to be providing a boost to market sentiment and reviving optimism for a steady energy demand recovery. Stephen Hahn, head of the US Food and Drug Administration, said over the weekend that the US is willing to fast-track vaccine approval if benefits outweigh the risks, helping the WTI push higher. 

In a recently-published report, Goldman Sachs analysts noted that they are expecting energy prices to rally in 2021, as reported by Reuters. “There is a growing likelihood that vaccines will become widely available starting next spring, helping support global growth and oil demand, especially jet,” analysts said.

Reflecting the risk-on market environment, the Euro Stoxx 50 and Germany’s DAX 30 indexes are up around 0.5% on the day and the S&P 500 futures trade in the positive territory.

Later in the week, PMI data from the US and China and the API’s and the EIA’s weekly crude oil stock reports will be looked upon for fresh impetus.

Technical levels to watch for

 

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