Update on the current oil situation:
During the first session of the week, crude oil continued on its bullish line from last week. Thus, the barrel of Brent oil returned to a price level it had not reached since May 2019, with a quotation at 73.60 dollars at mid-session. As for the US benchmark WTI oil, it reached the price of 71.10 dollars, a level not seen since October 2018.
Causes of this continued price rise:
Among the most likely causes of this significant and continuous rise in crude oil prices, it is known that the markets currently anticipate a strong demand for black gold this year with the recovery of economic activity in many countries around the world and despite the new waves of Covid-19 currently observed and the appearance of several new variants.
We also note that analysts referred at the beginning of the week to the data published at the end of last week by the IEA or International Energy Agency. Indeed, this organization, which is based in Paris and serves as an advisor to many countries in their energy policy, has predicted in its latest monthly report, that global oil demand should undoubtedly surpass pre-pandemic levels before 2022.
According to the report, global demand is expected to exceed 100 million barrels per day in the fourth quarter of next year. This would represent a slightly higher level than the previous peak in the fourth half of 2019, just before the crisis began. This data was of course welcomed by investors.
Data that moderates market optimism:
However, it is essential to keep in mind some news that could slow down or stop this price increase such as the negotiations on the nuclear agreement between the United States and Iran since the latter is likely to increase its oil supply in the near future.
It should be remembered that Iranian oil is subject to an embargo by the United States, but that the improvement in relations between the two countries could lead to an easing of sanctions and thus a significant supply of black gold to the market. Indeed, before these sanctions, Iran was the fifth largest producer of black gold in the world.