Oil takes breather after vaccine rally as stockpiles rise

Brent crude was up 38 cents, or 0.8%, at US$48.24 a barrel by 0616 GMT, having risen nearly 4% in the previous session.

West Texas Intermediate crude gained $2.09, or 4.8%, to $44.93.

U.S. crude oil inventories likely edged lower last week, while distillate stockpiles were seen decreasing for a 10th straight week, a preliminary Reuters poll showed on Monday, ahead of reports from the American Petroleum Institute and the Energy Information Administration (EIA).

AstraZeneca said on Monday its COVID-19 vaccine was 70 percent effective in pivotal trials and could be up to 90 percent effective, giving the world's fight against the global pandemic a third new weapon that can be cheaper to make, easier to distribute and faster to scale-up than rivals.

The contracts closed at their highest since early March on Tuesday, after a three-day rally pushed prices up around 8%.

"Progress on developing and distributing a vaccine de-risks the path back to normal for oil markets", said Stephen Innes, chief global markets strategist at financial services firm Axi.

However, any viable vaccine is not likely to be ready for mass use in the next few months, meaning lockdowns and travel restrictions will be in place into next year.

The sentiment was also bolstered by hopes that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, will continue to restrain production.

The Organization of the Petroleum Export Countries (OPEC) and other producers such as Russian Federation in the OPEC+ grouping have been withholding supplies to support prices after pandemic lockdowns earlier this year caused an evaporation in demand.

OPEC+, which meets on November 30 and December 1, is looking at options to delay by at least three months from January the tapering of their 7.7 million barrel per day (bpd) cuts by around 2 million bpd.

In the United States, President Donald Trump's administration gave President-elect Joe Biden access to resources enabling him to take over in January after an extended delay despite Trump's loss in the Nov 3 election.

US healthcare workers and others recommended that the nation's first COVID-19 inoculations could start getting shots within a day or two of regulatory consent next month, a top official of the government's vaccine development effort said on Sunday.