Energy researcher and director of a specialized website, Randolph Huber, confirmed that the market prospects are good, and this is what the OPEC + Producers Alliance is betting on, which will most likely resort to gradual productivity increases starting next April, as its features will be crystallized in the ministerial meeting. Next March.
He explained that there are currently strong hopes in the market that the Coronavirus pandemic has begun to recede, and the market is receiving further support from the expectations of the upcoming huge fiscal stimulus package from the United States, in addition to the scarcity of supply due to OPEC + production cuts.
For his part, Matthew Johnson, an analyst at the international consulting firm Oxyra, said that the price gains may find resistance from speculation and profit-taking in the market, but prices are receiving more support than the production contraction in the United States, especially in upstream shale oil projects, which are facing pressures. Large because of the orientations of the new US administration.
He pointed out that the progress made in combating the Coronavirus pandemic worldwide supports the strong expectations of economic recovery across the wider financial markets, including the crude oil market, explaining that there are unremitting government efforts to contain the spread of the virus, and many countries are currently moving to ease the closure measures.
For its part, the Vietnamese analyst, Yen Beach, a researcher in energy affairs, said that the noticeable decrease in daily new infections of the Coronavirus led to the emergence of better expectations for economic recovery and the resumption of international trade and its return to normal levels.
She pointed out that the currently proposed US stimulus package worth 1.9 trillion dollars is already making great progress in the approval process, which creates a state of optimism for the possibility of recording a smooth and rapid economic recovery in the United States, pointing out that the OPEC + coalition maintained supply restrictions during the month Saudi Arabia has voluntarily reduced its production by an additional million barrels per day until the end of next March, which removes the surplus oil in the market.
Concerning prices, oil rose to its highest levels in about 13 months, as the escalation of tension in the Middle East stimulated new purchases, while crude received support from hopes that an American stimulus and easing the general isolation measures will feed the demand for fuel.
According to "Reuters", Brent crude rose $ 1.02, or 1.6 percent, to $ 63.45 a barrel by 08:06 GMT, after reaching its highest level during the session at $ 63.76, the highest since January 22, 2020.
U.S. West Texas Intermediate crude futures gained $ 1.28, or 2.2 percent, to $ 60.75 a barrel. It touched $ 60.95, its highest level since Jan. 8, earlier in the session.
Oil prices gained about 5 percent last week.
"The early rapid rise in the oil market was due to the news," said Kazuhiko Saito, chief analyst at Fujitumi Commodity Brokerage, that Saudi Arabia intercepted and destroyed a drone bomb launched by the Iran-aligned Houthi militia towards the kingdom.
"But the rise is also driven by the growing hopes that an American stimulus and easing the general isolation measures will boost the economy and demand for fuel," he added. He said that WTI may decline due to profit-taking after it reached the level of $ 60.
US President Joe Biden pushed for the first major legislative achievement of his presidency Friday, as he turned to a group of local officials from both the Republican and Democratic parties for help on a $ 1.9 trillion plan to mitigate the effects of Corona.
Oil prices have risen over recent weeks as well, as supplies have tightened, largely due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies of the "OPEC +" group.
"Moreover, the strength of global stock markets has boosted investors' appetite for risk," said Satoru Yoshida, commodities analyst at Rakuten Securities.
Asian stocks rose to record highs, as successful global distributions of Coronavirus vaccines boost hopes for a quick economic recovery in light of new financial support from Washington.
Yoshida said that crude prices may go to $ 70 a barrel in light of low-cost money supply with financial easing around the world, rapid distribution of vaccines, and scarce supplies from OPEC + and shale oil producers in the United States.
And overtake the price of US West Texas Intermediate crude
The threshold of $ 60 a barrel, reaching a level not recorded in more than a year with the start of the outbreak of the Covid-19 epidemic, against the backdrop of the concerns currently spread about the supply, according to the "French".
At a time when the state of Texas is witnessing a cold wave, investors warn that it may affect production, and the US Meteorological Authority warned that an "unprecedented" cold wave will sweep the United States at the beginning of the week accompanied by polar winds that will lead to a sharp drop in temperatures.
For days, the country has been witnessing from the eastern coast to the western coast, freezing rain, snow, and snowstorms.
Southern states such as Texas, which usually record a high temperature, were also affected.
The National Weather Service said, "More than 150 million Americans live in a place where frost or freezing rain warnings have been made and preparedness plans have been put in place to face snowstorms."
Crude prices have been heading to rise for several months, in light of increasing optimism about the global economic prospects and hope about the large-scale US plan to revive the economy and confidence that the slowing pace of Coronavirus infections and the acceleration of vaccination campaigns will allow a return to a semi-normal life, which will support demand.
West Texas Intermediate and Brent have increased 20 percent since the start of the year.
What also contributed to supporting crude prices was Saudi Arabia’s announcement last month to cut production in February and March.
And the price of West Texas Intermediate crude received support recently with the issuance of expectations warning of the possibility of a decline in production in Texas due to the cold wave, which stopped work in some wells and caused blackouts and crippled transportation.
Vandana Hari, an expert at the Vanda Insights Institute in Singapore, explained that "the cold wave, additional Saudi cuts, and the promises of the American recovery plan have all brought an outcome ... But the most important factor, which the skeptics have turned a blind eye to, is that Covid is in decline in the world, and that has been for more than four weeks." ".
On the other hand, the OPEC crude basket rose last Friday, at $ 60.77 a barrel, compared to $ 60.54 a barrel the previous day.
The daily report of the Organization of Petroleum Exporting Countries (OPEC) said that the price of the basket, which includes the average prices of 13 crudes produced by the member states of the Organization, achieved the 11th consecutive gain, and that the basket gained about two dollars, compared to the same day last week, in which it recorded 58.92 Dollars per barrel.