Oil executives are hardly alone in hoping 2021 will be better than the decidedly low bar of 2020. But even an effective COVID-19 vaccine may no longer provide a route out of the mess the industry finds itself in.

Eight months after the entire oil sector was first humbled by the demand-sapping pandemic, energy stocks have been buoyed by the first successful vaccine trial. Brent crude has risen almost 15% to reach $45/bbl. The beaten-down shares of BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. have jumped between 12% and 25%.

Investors who missed the initial surge should be wary of the euphoria. Bearishness towards the sector was probably overdone, setting up a dramatic bounce at the first sign of good news. However, the industry has many more hurdles to come.

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