fxstreet.com 02 Feb, 2021 13:30 am

Brent crude oil reaches yearly highs

Brent crude oil reaches yearly highs
Brent Crude broke a critical fundamental level of $57 a barrel, a psychological resistance that may see Brent continue to price pre-Coronavirus levels

With the demand side of Oil improving exponentially, OPEC has started to increase crude supply by 300,000 barrels to the market in January – showing their confidence in oil prices’ stability now and going forward.However, disruptions and African nations Nigeria and Libya have slightly offset the supply hike, with a leak in a fundamental pipeline in Libya alongside a suspension in deliveries in Nigeria pulling away around 110,000 barrels of supply off the market.”  Furthermore, Goldman Sachs’ commodity analysts estimate of 500,000 a day restriction on supply has been greatly surpassed, with the average supply deficit ranging at around the 900,000 barrels a day mark.Ultimately, however, it is what happens in the physical market that sets the final price.

And in this case, the physical market for Oil is more robust than it was at the peak of the pandemic.Ole Hansen, head of commodities research at Saxo Bank A/S, stated that currently, the oil market is “supported by the combination of tightening fundamentals, as seen through the rising backwardation and the renewed risk appetite in the U.

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