Oil prices rose more than 1 percent on Monday, extending last week’s gains as traders eyed a recovery in demand due to successful coronavirus vaccine trials.
Sentiment was also bolstered by expectations that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, might extend a deal to restrain output.
The contango structure in the market, where the prices of front-month delivery contracts are lower than those for delivery six months later, narrowed to 32 US cents, its smallest since mid June, indicating that concerns about a glut were receding.
Outlook for demand has improved with news indicating progress towards developing COVID-19 vaccines. A US official said first inoculations in the United States could start a day or two after regulatory approval was secured.