First explanations for this phenomenon:
First of all, the cold spell that hit Texas last week and forced the refineries to close has slightly weighed on the prices, it is again around 60 dollars that the barrel of WTI is trading at the beginning of this week.
However, demand has not really returned to last year's levels and the International Energy Agency has revised its forecast for 2021 down to 5.5 million barrels per day, or 280,000 less, and also points out that the sharp rise in infection rates had triggered a return to containment in some countries, which delayed the expected rebound.
Investors remain optimistic, however, and are banking on ongoing vaccination campaigns that should help economies recover with a gradual lifting of travel restrictions and a resumption of air and car travel, which is likely to increase demand.
Finally, the monetary policies that are fuelling the markets with liquidity and the stimulus policies, particularly in the United States, are also driving investor optimism this week.
Oil Production Cutbacks :
While a recovery in demand seems to be expected by the markets, another explanation for the current rebound in crude oil is the limited supply. Indeed, OPEC has cut production since January by 7.2 million barrels a day, or 7% of global demand.
In particular, Saudi Arabia has decided to reduce its production by one million barrels per day, i.e. 10% of its production for February and March 2021, i.e. more than OPEC, which has surprised the markets.
However, the current craze on the oil markets should be moderated by raising the problem of the Iranian dossier. Indeed, American President Joe Biden is currently trying to establish the nuclear agreement denounced by Donald Trump. The latter had imposed new sanctions on Tehran. Iran could resume its oil exports of up to 2 million barrels a day. So one wonders whether the moderation of producers will last over time. The next OPEC meeting in early March should therefore be followed with interest.