Oil prices rose, and US West Texas Intermediate crude increased 2.25% to record $ 60.8 a barrel in futures contracts for delivery next March, the first time in more than a year before prices collapsed due to Covid-19. This coincides with supply concerns as Texas is hit by a severe cold wave that traders warn could cut production.
The price of benchmark Brent crude oil increased by 1.79% to 63.55 dollars a barrel in futures contracts for next April delivery, at 05:03 on Monday morning GMT.
Crude oil prices have risen recently on the background of optimism about the global economic recovery prospects, the US stimulus package, as well as the acceleration of the administration of anti-Covid-19 vaccines and the consequent expectations of slowing virus infection rates and then an increase in demand as life gradually returns to normal.
The price of US West Texas Intermediate crude reached its worst level on April 20 at minus $ 37.63 a barrel, with the collapse of demand with the suspension of travel due to the global pandemic and the fullness of oil tanks.
WTI prices were pushed higher with expectations that production in the major oil-producing state of Texas could contract due to a wave of cold weather, forcing wells to shutdown, damaging transportation, and causing power outages.
Brent crude, benchmark, increased on February 8 by 1.26%, surpassing $ 60 a barrel in futures contracts for the first time since January 2020.
The cold wave, additional Saudi cuts, and new US stimulus promises are helping to push prices, according to Vanda Insights at Vanda Insights in Singapore, Vandana Hari, as quoted by Agence France-Presse.
But the single biggest factor – which may be unbelievable – is that COVID-19 globally has been in decline for more than four weeks now, according to Harry.
This comes after Saudi Arabia pledged additional supply cuts in February and March over the reductions of other members of the Organization of the Petroleum Exporting Countries and its allies, including Russia, which contributed to achieving balance in global markets and supporting prices.
Last January, the US bank UBS had expected Brent crude prices to rise to $ 60 a barrel by mid-year 2021, after Saudi Arabia’s sudden production cut unilaterally, indicating that demand is likely to recover substantially in the second quarter with the distribution of COVID-19 vaccines and increased travel activity.