At the start of regular trading a week prior, the oil price for the Brent contract hit $70 per barrel for the first time in a year.
A week after, traders are still eyeing the same threshold amid tighter supplies and domestic upheaval in the world’s biggest exporter of black gold.
Similarly, the development of the vaccination process worldwide helped boost the overall market sentiment.
Last week, vaccination across the world ramped up by more than 20% from a week prior. The world’s biggest economies were in the lead.
This figure is likely to grow further this week amid the continued approval of new vaccine companies.
Novavax reached the 96% efficacy percentile on Phase 3 clinical trials of inoculations last week. Now, the company is preparing to file for regulatory approval from the US FDA.
Should this happen, the United States will house three approved vaccines. This, will no doubt will help the economy run back to normal operations in no time.
In the latest charts, Brent crude futures contract jumped by a robust 1.17% to $69.99 per barrel. It was just a step away from hitting $70 per barrel.
Following the uptrend, the West Texas Intermediate futures contract added the same percentage. It is currently exchanging hands at $66.38 per barrel.
The recent rise is primarily due to the upbeat retail sales and industrial activity data released by the world’s second-largest economy.
In China’s latest report, the country’s industrial output for the January to February period jumped by 15% year over year. This is higher than what we were expecting.
Similarly, its output on heavy industrial materials including cement, steel, aluminum, and coal, among others, added a double-digit growth.
Eyes on OPEC and Saudi Arabia
Moreover, prices are expected to make significant advances in the coming trading days due to happenings in the Middle East.
OPEC’s decision to extend supply curbs amid the rising prices concerns industry groups but benefits crude prices.
The organization defended its decision by citing volatility in the overall international demand and incapacitated operations in Texas, the central hub among refineries in the US.
By the start of last week, only seven of the 18 total refineries in the state are operational amid the cold spell havoc seen on the prior period.
Similarly, reports show that de facto leader Saudi Arabia decided to cut crude oil supply on April orders from four North Asian countries by at least 15% each.
The Kingdom has practiced the same curb over the last few months in observance of the OPEC production cut.