Oil Prices Up Over 2% On EU Deal

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Oil prices rose over 2 percent on Tuesday as promising early data on a host of Covid-19 vaccine candidates as well as a breakthrough agreement over new fiscal stimulus to pull European economies out of the worst recession in memory fueled hopes that the global economy will soon recover.

Benchmark Brent crude rose 95 cents, or 2.2 percent, to $44.23 a barrel, while West Texas Intermediate (WTI) crude futures were up 86 cents, or 2.1 percent, at $41.78 a barrel.

Early data from trials of three potential Covid-19 vaccines released on Monday showed positive results, raising optimism about ways to counter a pandemic that’s killed more than 600,000 people and triggered economic turmoil worldwide.

Scientists at Oxford University reported that their experimental coronavirus vaccine prompted a protective immune response in hundreds of people who got the shot in an early trial.

The head of emergencies at the World Health Organization hailed “good news” in results shown by two Covid -19 vaccine candidates in early trials, but warned “there’s a long way to go.”

Meanwhile, risk sentiment got a further boost after EU leaders agreed on a EUR 1.8 trillion package of measures to tackle the exceptional nature of the economic and social situation posed by the coronavirus pandemic.

After four days of marathon talks in Brussels, EU leaders conceded the package worth EUR 750 billion. Accordingly, the bloc will issue debt jointly which would be provided to member nations hit hardest by the Covid-19.

Out of the EUR 750 billion recovery plan, EUR 390 billion will be in the form of grants and EUR 360 billion of low interest rate loans. Now the deal needs to be approved by the parliament of 27 member states.

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