08.02.202115:21 Forex Analysis & Reviews: Crude oil prices are at the peak again

Crude oil prices continue to rise on Monday morning. Note that last week's trading ended with a significant growth that allowed black gold to once again reach its maximum values. This time, the record of a year ago was broken. If this week becomes equally productive, then the situation on the oil market may advance significantly, and prices will rise so much that the question of fluctuating demand will be removed. The main driver of positive changes was the excellent growth in demand from China. Despite new outbreaks of coronavirus infection and continuing strict restrictive measures, the consumption of crude oil in the country is only gaining momentum, and demand is increasing day by day. Investors cannot explain this, but this state of affairs cheers them up quite well.

According to Chinese statistics, 127 tankers with crude oil were sent to ports at the beginning of February alone, the maximum in the last six months. In total, this supply is equal to 250 million barrels of black gold. Such a huge amount of oil has not been delivered to the country for a long time, the last time such a large supply was made was before the coronavirus pandemic. Then the cost of WTI crude oil began to fall rapidly and the Chinese authorities hastened to make a large purchase on favorable terms to replenish their reserves for a long period.

Analysts of oil supplying companies in China already note that sales volumes are not only showing significant growth but also increased to such a level that they turned out to be higher than pre-crisis values. This cannot but evoke a positive response in the raw materials market.

In general, the most significant thing in this situation is that the demand on the market begins to grow, and the voluntary independent limitation of production in some countries that have signed an agreement with OPEC further encourages the market. It all boils down to the fact that the potential for increasing the cost of crude oil is rapidly expanding. Another significant point is that the countries, which have limited their own production, have begun to treat this with greater responsibility, that is, to comply with the provisions prescribed by the contract in time and in full. This is extremely important in the current conditions since only such work will allow us to get out of the crisis faster.

However, not all experts are in a hurry to share the positive sentiment of the markets. Several individual analysts are trying to gauge demand and market developments in the light of the coming changes. In particular, the most exciting issue is the mass vaccination and its impact on economic stability in certain regions and the world as a whole. According to some, too much hope has been pinned on vaccines, which may not be justified.

Many also point to the fact that the rise in the cost of crude oil is unlikely to lead to a rise above $60 per barrel. However, today this threshold has been crossed, albeit temporarily. In such a situation, producers of raw materials are tempted to increase production, which can again destabilize the markets.

Futures contracts for Brent crude oil for delivery in April on the trading floor in London rose 1.04% or 0.62, to $59.96 per barrel. Friday's trading ended with good growth by 0.9% or $0.5, to $ 59.34 per barrel. This is the maximum value since the end of January this year.

Futures contracts for WTI light crude oil for delivery in March on the electronic trading floor in New York also went up - by 1.09% or $0.62, to $57.47 per barrel. Friday's trading ended with an increase of 1.1% or $0.62, which sent the final price at $56.85 per barrel. This also became the highest figure since January 21, 2021.

Thus, the Brent crude oil mark was able to increase 7.8% over the past week, while WTI rose by 8.9%. This is a very good result, especially taking into account the fact that quite recently there were many problems in the oil market.