Weekly Oil Price Progress: steep price rise

weekly oil price


The oil price rise is continuing and the geo-political crises in the Middle East are on the wane.

The restoration of diplomatic relations between Qatar and the Saudi Arabia has been the most significant news during the week. The process was then extended to Bahrain and UAE too.

The relations between the Sunni block and Iran, however, remains to be seen, especially when the new US administration take over the reins.

Iran’s insistence on being compensated for the loss of income due to sanctions and determination to enrich uranium up to 20% could be the main stumbling blocks in the event of making effort to salvage the 2015-nuclear deal that was signed when President Obama was in power.

Much to investors’ surprise, the oil price does not seem to be responsive to Coronavirus data anymore; at present, the situation is much worse than what we saw in April last year.

In the UK, there were over 5000 deaths last week alone, with surging infections; the Mayor of London even issued a notice of serious situations, as there were fears about hospitals being overwhelmed.

Despite the gloomy outlook of Western economies, not only do Asian countries manage the pandemic well, but also look forward to stronger growth this year. The rising demand for oil reflects the confidence.

All in all, it has been a good week for oil investors and producers. The latter, however, is not out of wood yet, if they cannot strike a balance when it comes to production cuts – just to boost the price.

 


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