For over three successive weeks, WTI crude price remains above $40.00 and there are no signs of yet another nose-dive that we saw at the beginning of the first wave of the pandemic.
Not only is it encouraging news for the countries which heavily rely on powering up their economic engines, but also for millions of human being whose livelihood entirely depends on it.
The forthcoming change in the US administration, possibility of relaxing international sanction on Iran, warming relations between Israel and its powerful Middle Eastern neighbours and the signs of a lasting solution to Libya’s political crisis are some of the factors, among many, that made their individual contribution to the rally.
Although irresponsible behaviour of some individuals, especially young shoppers who flock near major department stores may, trigger off even a third wave of the pandemic, oil price recovery will not be derailed.
Judging by the recent trends during the pandemic, a potential third wave, however, will not dampen the sentiments of the oil market that we saw at the beginning of the year.
As I have noted time and again, the recovery of oil price has been in inverse proportion to the US crude inventories.
In short, it’s still a major factor when it comes to determining the oil price.
The US inventories are in decline and the WTI crude price is rising; the correlation is well established.
