InvestorQ : Why did the Brent crude prices rally so sharply on Tuesday 12 January?
Debbie Mascarenhas made post

Why did the Brent crude prices rally so sharply on Tuesday 12 January?

Answer
image
Arti Chavan answered.
5 months ago
Follow

Brent Crude prices touched another intermittent high of $57/bbl. The crude prices have now rallied from a low of $36 in a span of just over 2 months. That is a sharp rally of 58% at a time when most analysts were getting sceptical about oil. If you look at from the lows of April 2020, then crude is up nearly 500%, but that was an exceptional situation.

The latest burst in price of crude came after Saudi Arabia confirmed that it will be cutting another 1 million barrels per day or bpd of crude oil supply each month for the months of February and March. This was already committed informally by Saudi Arabia in the last OPEC meeting to enable non-OPEC members to hike their supply of oil.

That was the only reason. In addition, the US stockpiles of crude at Cushing have also fallen sharply. There are now expectations that the latest rounds of stimulus could pave the way for higher oil demand. Also, the oil markets are not sure about Biden’s stand on fracking on Federal land parcels, although he is known to averse to that idea. That has kept the oil markets guessing, leading to higher prices.

0 Views