A rise in oil prices after the increased demand for fuel due to the receding of the Corona epidemic, especially in the United States and Europe, and expectations that “OPEC +” would raise oil production.
Oil prices rose to their highest levels in several years, today, Friday, and are heading for the third week of gains in a row, supported by an improved global demand outlook, as an increase in vaccination activity leads to the lifting of pandemic-related restrictions.
Brent crude futures rose 35 cents to $72.87 a barrel by 15:20 GMT, after closing at their highest level since May 2019 on Thursday. Brent has achieved a weekly increase of 0.7% so far.
And US West Texas Intermediate crude futures advanced 70 cents to $ 70.99 a barrel, after rising yesterday, Thursday, to their highest level since October 2018. They are up 1.2% since the beginning of the week.
“The pace of demand returning outweighs the pace of supply returning, and we will need more supply to meet that demand,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
The International Energy Agency said in its monthly report that the Organization of the Petroleum Exporting Countries and its allies, within the framework of the “OPEC +” group, will need to increase production to meet the demand that is heading to recover to pre-pandemic levels by the end of 2022.
The Paris-based agency indicated that “OPEC + needs to increase production so that global markets receive sufficient supplies.”
She stressed that the rising demand and short-term policies of countries “are in contrast to the agency’s call to end new financing for oil, gas and coal.”
And in 2022, she added, “there will be scope for the 24 members of the OPEC + group, led by Saudi Arabia and Russia, to increase crude supplies by 1.4 million barrels per day above their target for the period between July 2021 and March 2022.”
The American investment bank, “Goldman Sachs” expects Brent crude prices to reach $ 80 a barrel this summer, betting that the recent rise in the oil market will continue as the distribution of vaccines against the Corona virus boosts global economic activity and demand for crude.
Analysts at ANZ explained that data reveal that car traffic on the roads is returning to pre-Covid-19 levels in North America and most of Europe.
They added that “even the jet fuel market is showing signs of improvement, while flights in Europe have risen 17% over the past two weeks, according to Eurocontrol.”
And figures provided by a source in “OPEC +”, today, Friday, stated that “OPEC” and its allies Maintain a strong commitment level Oil production restrictions agreed in May.
And “OPEC +” began returning 2.1 million barrels per day to the market during the period from May to July, as part of a plan to gradually ease the unprecedented oil production restrictions that it adopted last year.