The Price of Oil Exceeded Annual Record
OREANDA-NEWS. The price of Brent crude oil futures on the London ICE exchange at auction on Monday, January 8, for the first time in more than a year, exceeded $60 per barrel, rising to the level of $60.05. The last time a barrel of Brent was worth more than $60 only on January 29, 2020.
WTI crude futures for March delivery are up 1.19% to $57.53. Thus, over the past week, Brent oil rose by 7.8%, WTI-by 8.9%.
Analysts note the positive mood of market participants due to mass vaccination against coronavirus in the United States and hope for an increase in demand for raw materials as the US economy recovers.
Oil prices are rising against the background of the OPEC+ committee's stated commitment to the policy of curbing production. OPEC's forecast that the oil market will remain in short supply for the entire 2021 year added to the positive mood on the market.
An important driver of the rise in oil prices remains high demand from China, which has not decreased, despite the new outbreaks of coronavirus. 127 tankers with 250 million barrels of oil are being sent to Chinese ports. This is a maximum of six months.
Stanislav Mitrakhovich, an expert of the National Energy Security Fund, a lecturer at the Financial University under the Government of Russia, commented on the current situation with oil prices.
In an interview with RT, he noted that Saudi Arabia, in the framework of previous negotiations, promised to make unilateral commitments to reduce oil production by 1 million barrels per day. The expert said that these agreements have been in effect since February, which raises the price of «black gold». In addition, the price of oil is affected by the fact that the new US President Joe Biden does not yet plan to lift sanctions on Iran. The COVID-19 pandemic and vaccination situation should be taken into account. The expert said, that air travel may be resumed during the year, which will also increase the demand for oil.