Oil has risen from historic levels that fell last year as the outbreak hit demand as the Organization of Petroleum Exporting Countries and its allies intended to relax record production cuts.
Despite the uncertain outlook for a recovery in demand as the pandemic continued, deep supply cuts from producers reduced inventories.
OPEC + continued its oil production policy with a meeting on Wednesday. The OPEC + Joint Ministerial Observation Committee met partially on Wednesday and expressed its optimism about the recovery for 2021. The group expects production cuts to keep the market open throughout 2021, although the group has lowered its forecast for the pace of recovery in oil demand this year.
While economic prospects and oil demand remain uncertain in the coming months, the gradual launch of vaccines around the world is a positive factor for the remainder of the year, driving the global economy and demand for oil.
While stocks are falling rapidly, the market is adjusting prices with the smooth launch of vaccines, and it may happen shortly.
Oil prices extended gains on Wednesday after the meeting ended and benchmark Brent crude traded as high as $58.74 a barrel, the highest since late February 2020.
The OPEC+ panel meets next on March 3 and this is expected to be followed by a full OPEC+ gathering to decide policy.