Why has crude oil rallied so sharply in the last few days?

In the last few days, the rally has been very sharp in the crude oil market. In fact, not only has oil rallied but even the spread between WTI and Brent has narrowed. In fact, Brent crude touched highest since October 2018 on expectations of higher demand. WTI Crude touched $72.31/bbl while Brent Crude rallied to $74.29/bbl on expectations of a rapid economic recovery and sharp fall in supply.

In addition, the crude prices have also been led higher by falling US inventories as well as hopes that the massive vaccination drive would result in a pick-up in GDP growth. There is one more interesting logic. Rising inflation pressures have vastly increased the appeal for crude oil as a stable and reliable hedge against inflation.