Oil prices rallied higher at the last trading session of the week. Oil traders are staying bullish on the bias that Saudi Arabia’s recent pledge to make voluntary cuts on its crude oil outputs continued to excite traders in a market that has been heavily disrupted by COVID-19.
What you should know: At press time, the British-based oil contract, Brent crude futures gained 0.63% to trade at $54.72 a barrel.
- U.S. West Texas Intermediate (WTI) futures rallied by 0.61% to trade at $51.14 a barrel. The American contract gained 0.4% on Thursday after hitting its highest price level since February 2020 at $51.28.
- Both major oil benchmarks are on track for weekly gains of about 5% for this week.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on the broader market sentiments that keep crude oil prices above $50 a barrel:
“To a large degree, oil markets continued to mimic broader markets trading off the same US stimulus impulse, while treating the latest COVID-19 scare as nothing other than a speedbump thanks to the stimulus and vaccine look through narrative.
“Prices were underpinned by the OPEC+ meeting earlier this week as Saudi Arabia pledged to keep a lid on supply and positive mood music amid expectations of greater stimulus following the blue sweep in the Georgia Senate run-offs.
“The annual rebalancing of the major commodity indexes starts tomorrow which will unquestionably keep a bid under oil futures which are still in catch-up mode to its hard commodity and industrial metal peers.
What to expect: Energy experts do not have definitive news that COVID-19 vaccines will not work against COVID-19 mutant variants, though traders will buy the oil market dips knowing the vaccinations are the only way out of the COVID abyss in 2021.