Oil Futures Up ahead of Expiries, Novavax Vaccine Results

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- In early activity on the final trading day of the month, crude and refined products futures on the New York Mercantile Exchange and Intercontinental Exchange moved higher ahead of expirations for March Brent, and the February ULSD and RBOB contacts this afternoon as investors assessed better-than-expected results from the late-stage trials for the fourth coronavirus vaccine developed by U.S. biotech firm Novavax, showing over 89% efficiency rate in blocking the virus.

Late Thursday, Novavax said its coronavirus vaccine proved 89.3% effective in blocking the original strain of coronavirus first detected in Wuhan, China over a year ago, with efficacy rate seen slightly lower for the UK B117 strain at 85.6%. Further, NVX-CoV2373 vaccine proved 60% effective against the strain discovered in South Africa -- the variant believed to be more resistant to current vaccines. Despite reduced efficacy rates in blocking the variants, these are still encouraging results for the coronavirus vaccine that requires a single dose treatment at a cost of $16 a shot. The vaccine requires normal refrigeration temperatures for storage much like Oxford's AstraZeneca's vaccine, making both an optimal option for developing countries. India stands to be the largest recipient of Novavax vaccine, according to a global network of publicly disclosed vaccine deals published by Bloomberg.

Domestically, health authorities administered over 27 million doses since the beginning of the vaccination campaign on Dec. 14. The latest inoculation rate was roughly 1.2 million doses per day -- a sharp increase since the first days of the campaign. President Joe Biden expects daily inoculations to pick up speed to 1.5 million doses to meet the goal of 100 million doses within first 100 days of his administration.

New York, California, and Michigan governors this week began to gradually reopen their economies, allowing for contact-sensitive business activity in leisure and hospitality industries to resume operations. U.S. jobless claims during the week ended Jan. 22 rose by a less-than-expected 847,000, with continuous filings -- meaning people receiving unemployment benefits for consecutive weeks also fell below the consensus to 4.771 million. That might indicate the receding virus cases and re-openings of large U.S. states slowed widespread layoffs across the country.

On the economic calendar Friday, U.S. consumer sentiment from the University of Michigan is expected to remain unchanged at 79.2 in late January -- the final reading for the month. Consumer sentiment posted a marginal decline in late December-early January despite the rise in COVID-19 deaths, political uncertainty in Washington, D.C., and the House impeachment of Trump. The survey published on Jan. 15 indicated two offsetting shifts that helped narrow the January loss in sentiment -- the progress of COVID-19 vaccines and A partisan shift in expectations due to the anticipated impact of Biden's economic policies. The updated survey will be released 10 a.m. ET.

Near 7:30 a.m. ET, West Texas Intermediate futures for March delivery gained 24 cents to trade at $52.61 per barrel (bbl), while the prompt-month Brent contract advanced 43 cents to trade just below $56 bbl before expiration Friday afternoon. Brent April futures held its discount to the expiring contract at 42 cents. NYMEX February ULSD futures added 0.59 cent to $1.6076 gallon, with the next-month delivery March contract trading near parity. NYMEX RBOB February futures surged over 0.02 cent to near $1.6065 gallon and next-month March futures widening its discount against the expiring contract to 1.06 cent.

Liubov Georges can be reached at liubov.georges@dtn.com

Liubov Georges