Brent crude futures rose 45 cents, or 1.1%, to $42.85 by 1030
GMT, while U.S. West Texas Intermediate (WTI) crude futures
gained 34 cents, or 0.8%, to $40.63.
Both contracts jumped 8% on Monday, in their biggest daily gains
in more than five months, after drugmakers Pfizer and BioNTech
said an experimental COVID-19 treatment was more than 90%
effective based on initial trial results.
Mass rollouts, however, are likely to be months away and subject
to regulatory approvals.
"A viable vaccine is unequivocally game-changing for oil - a
market where half of demand comes from moving people and things
around," JP Morgan said in a note.
"But as we have written previously, oil is a spot asset that
must first clear current supply and demand imbalances before
one-to-two-year out prices can rise."
Prices were also boosted by comments from Saudi Arabia's energy
minister, who said on Monday the Organization of the Petroleum
Exporting Countries (OPEC) and its allies, together known as
OPEC+, could tweak their supply cut pact if demand slumps before
the vaccine is available.
OPEC+ agreed to cut supply by 7.7 million barrels per day from
August through December and then ease the cuts by around 2
million bpd in January.
But the negative impact that renewed lockdowns in Europe are
having on fuel demand, as well as rising Libyan production, kept
prices in check.
Traffic in London, Paris and Madrid fell sharply in November
after a peak in October, according to data provided to Reuters
by location technology company TomTom, that covered mobility
until Sunday evening.
France, the United Kingdom, Spain and Poland were under the
strictest lockdowns in Europe, according to the Oxford
stringency index that assesses indicators such as school and
workplace closures, and travel bans.
Meanwhile Libyan production has risen above 1 million bpd in
recent days from 100,000 bpd in early September.
(Additional reporting by Sonali Paul and Seng Li Peng; Editing
by Susan Fenton)
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