Oil rally gathers pace as coronavirus vaccine rollouts begin

Asian shares also bounced back as progress on vaccines boosted investor sentiment

Brent's rise above $50 per barrel has been attribute to higher anticipated demand as countries quickly roll out Covid-19 vaccines. AP

Oil prices rose by around 1 per cent on Friday, extending a sharp rally overnight that saw Brent rise above $50 for the first time since March, as coronavirus vaccination rollouts kept hopes alive that demand for crude would build up next year.

Brent was up 0.9 per cent at $50.70 a barrel, after gaining nearly 3 per cent on Thursday.

US oil was up 1 per cent at $47.28 a barrel, having also risen almost 3 per cent in the previous session.

That leaves prices set for a sixth consecutive week of gains as promising vaccine trials helped quell gloom over record increases in the number of new infections and deaths around the world in the coronavirus pandemic.

Britain began inoculations this week and the US could start vaccinations as early as the coming weekend, while Canada on Wednesday approved its first vaccine with initial shots due from next week.

"The recovery from the pandemic will accelerate once a vaccine is widely available, further supported by ongoing fiscal and monetary stimulus from governments around the world," ANZ Research said in a note.

Outside advisers for the US Food and Drug Administration have voted to endorse emergency use of Pfizer's vaccine, paving the way for the agency to authorise its use to inoculate a nation that has lost more than 285,000 lives to Covid-19.

"The broad market rally is expected to continue next year, with commodities set for a positive year amid an improving economic backdrop," ANZ said.

Meanwhile, Asian shares bounced back on Friday as progress on Covid-19 vaccines boosted investor sentiment, but tricky Brexit negotiations and US stimulus talks capped gains in riskier assets.

MSCI's ex-Japan Asia-Pacific index rose 0.5 per cent, on track for its sixth straight week of gains, while Japan's Nikkei dropped 0.6 per cent.

Investors bet on stronger economic growth next year as more countries prepare for vaccinations.

On Wall Street, the Dow Jones Industrial Average fell 0.23 per cent, the S&P 500 lost 0.13 per cent and the Nasdaq Composite added 0.54 per cent.

US stocks were mixed as near-term US fiscal stimulus appeared unlikely after Democrat House Speaker Nancy Pelosi suggested wrangling over a spending package and coronavirus aid could drag on through Christmas.

"US policymakers are still trying to hammer out a coronavirus relief package," wrote Joseph Capurso, a strategist with the Commonwealth Bank of Australia.

"The US economy needs fiscal relief because lockdowns continue to spread. The lockdowns are closing businesses and preventing spending."

In the currency market, Brexit uncertainties overshadowed trading in sterling. The British pound traded at $1.3307 on Friday, flat on day but having lost 0.9 per cent so far this week against a generally weaker dollar.