Key Points

• Vaccine rhetoric shores up crude oil
• Chinese economic data ignites hope of recovery
• Coronavirus second wave in Europe and U.S.
• Technical analysis

Pfizer Inc’s (PFE; NYSE) vaccine, which is reported to be at least 90% effective is just pending more safety data and regulatory review by the relevant authorities. Last week, based on this headline Crude oil prices climbed from monthly lows below $38,00 to reach $43,11 in an impressive bull run. Prices later corrected onto the downside as the optimism was watered down by fears of increasing cases in Europe.

Looking at the current week, Moderna Inc’s (MRNA; NASDAQ) experimental vaccine has been declared to be 94.5% effective in holding back COVID-19 banking on preliminary data from a late-stage trial. Oil prices picked up the bullish momentum once again to remain strong above $40 per barrel. If the vaccine can be approved and administered before the end of the year, the fragile oil market is likely to remain strong trading above the key psychological price of $40 per barrel.

If the two vaccines are approved, the United States might have two vaccines authorized for emergency use before the end of the year, whilst an impressive 60 million doses of vaccine are projected to be available in a very short time frame.

The Chinese economy is displaying some level of resilience against the negative effects of the coronavirus. The latest data showed that Industrial Production increased by 6,9% an impressive recovery as compared to -13,5% which was recorded in February at height of the fight against Covi-19 in the Wuhan region. With economic activity being robust in the world’s second largest economy, crude oil prices are set to remain upbeat. The economy imports on average an incredible 11 million barrels per month against global output which averages 70.5 million barrels per month.

Despite the efforts being made on the vaccine development frontier, new Covid19 cases are on the rise once again. Global cases have now reached 54 million whilst deaths are standing at 1.3 million, therefore prompting the need for new movement restrictions in Europe. The restating of lockdowns has dampened the hopes of a V-shaped global economic recovery.

Technical Analysis

Prices are currently trading above a key support region ranging between $40.63 and $41.27 per barrel. On the upper side, there a monthly ascending channel and if bulls successful drive prices into that space, $45 will come into full view.

The current major trend is biased onto the downside as reflected by the 200 Moving Average which is pointing downwards. This is despite the fact that prices are trading above the 200 MA as well as the 60MA. However, if prices close above $43.80 the bearish bias will be overturned.

Daily Pivot Points

Name	S3	S2	S1	Pivot Point	R1	R2	R3
Crude Oil WTI	38.43	39.29	40.37	41.23	42.31	43.17	44.25
Brent Oil	40.87	41.79	42.83	43.75	44.79	45.71	46.75
Natural Gas	2.379	2.527	2.591	2.739	2.803	2.951	3.015
Heating Oil	1.1580	1.1811	1.2053	1.2284	1.2526	1.2757	1.2999

Weekly Pivot Points

Name	S3	S2	S1	Pivot Point	R1	R2	R3
Crude Oil WTI	31.28	34.22	37.18	40.12	43.08	46.02	48.98
Brent Oil	34.02	36.74	39.86	42.58	45.70	48.42	51.54
Natural Gas	2.595	2.708	2.861	2.974	3.127	3.240	3.393
Heating Oil	0.9714	1.0572	1.1266	1.2124	1.2818	1.3676	1.4370