Since the beginning of the year, oil prices have been on a steady incline, as crude stockpiles slowly shrink and investor optimism rises.
Brent crude, which was below US$35 at the beginning of the fourth quarter, have now soared to nearly US$60 per barrel as of Thursday. The surge in price implies the oil market is beginning to show signs of a rebound, as revenues increase for oil-rich countries and gasoline prices at the pump rise. As noted by Bloomberg, one of the main US storage facilities for crude have seen their inventories drop below their five-year average, suggesting that OPEC and its allies are gaining traction in draining excess reserves.
However, despite crude inventories showing signs of receding, there is still skepticism in the market, especially since Covid-19 is not showing signs of dissipating anytime soon. The emergence of new virus strains have caused a number of countries to tighten their border restrictions, resulting in subdued air travel and mobility.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
