Oil tops $45 a barrel in London for the first time in 10 weeks

Oil rose above $45 a barrel in London for the first time in 10 weeks as financial markets continued to advance on a vaccine breakthrough and U.S. crude stockpiles appeared to retreat. Brent futures advanced in tandem with equity markets, having been buoyed initially this week by the election of Joe Biden as U.S. president and then Pfizer Inc.’s vaccine announcement.

At the same time, the overall price structure has strengthened with a sharp narrowing of the spreads between monthly contracts, signaling that fears of oversupply are abating.

“There’s optimism now that there’s light at the end of the tunnel,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas. “Expectations around the path to economic recovery, and a recovery in oil demand, have changed and oil prices are reflecting that.”