As concerns remain blocking demand in the first half of the year, Oil prices touched the highest levels in recent months with OPEC and its allied manufacturers’ expectations that the coronavirus pandemic may restrict production to current levels in February.
Prices rose in line with broader financial markets with Brent crude futures reaching $53.17 a barrel, the highest since March 2020. West Texas Intermediate (WTI) crude touched $49.71 a barrel, the highest since February 2020.
March Brent crude futures were at $52.97 a barrel, up $1.17 or 2.3%, by 0617 GMT while February WTI crude futures rose $1, or 2.1%, to $49.52 a barrel.
While the demand for crude oil is expected to increase by 5.9 million barrels per day to 95.9 million barrels this year, serious risks such as low demand expectation in the first half of 2021, deep investment cuts and huge job losses continue.
Prices ended 2020 at about 20% below the average of 2019, and despite the world’s leading manufacturers agreeing to record production cuts, they have not recovered from the impact of global lockdown measures that lower fuel demand.
Expecting an increase in demand, OPEC and allied producers, including Russia, decided to increase production by 500,000 barrels per day in January last month and decided to meet every month to review production.
However, according to some analysts, OPEC + will maintain January levels, abandoning further production increases for February as COVID-19 cases continue to climb and vaccines spread slower than expected.