Oil rises in value
Oil prices are rising steadily amid rising tensions in the Middle East. The Saudi-led coalition at the weekend announced it had intercepted an explosives-laden drone launched by the Husis towards Abha airport in south-western Saudi Arabia.
Prices are also supported by optimism about a recovery in demand.
"More and more countries and regions are relaxing quarantine measures as vaccination helps contain the spread of coronavirus", one expert noted. A controlled pandemic situation as well as the Democrats' proposed fiscal stimulus package (in the U.S.) have boosted hopes of reflation and boosted equity, oil and industrial metals markets, according to the expert.
The $1.9 trillion support package for the US economy is making good progress, giving market participants hope for a smooth and rapid US economic recovery.
Supply-side fundamentals are also supporting the market. OPEC+ countries are maintaining production cut levels this month. In addition, Saudi Arabia is voluntarily reducing production by a further 1m bpd in February and March.
Meanwhile, data from US oil services company Baker Hughes released last Friday showed an increase in the number of active oil rigs in the US last week by 7 units to 306 rigs. The rig count has increased for twelve straight weeks, but is still lower than a year earlier when it stood at 678 units.
April Brent crude futures on London's ICE Futures exchange stood at $63.40 a barrel, up $0.97 (1.55%) from the previous session's closing price.
Price of WTI futures for March grew by $1.24 (2.09%) to $60.71 per barrel in electronic trading on NYMEX, which is $1.08 (1.82%) above the level at the close of previous trading.