The oil price that fell slightly on Wednesday
morning, started recovery again by early evening from stronger than expected
economic data from China.
In addition, the colossal stimulus package announced
by the incoming US president, Joe Biden, struck a chord with the global markets
as a whole with his unequivocal message – “There is no time to waste.”
Mr Biden unveiled $1.9 trillion package in order to
support the struggling Americans as well as roll out the vaccines as soon as
practicable in order to minimize its toll being taken on the ordinary
Americans.
Not only is a daily death toll over 4000 a day, a
humanitarian issue, but also is becoming a moral issue, as the world’s most powerful
nation struggles to get a grip on it.
It’s clear that the cuts by the OPEC+ has a direct
impact on the supply side of the evolving oil equation and if the price
continues to surge to an extent that can damage the tentative economic
recovery, Mr Biden may not be in a haste to ban fracking on federal lands.
There are already signs that some shale oil
producers emerge from self-imposed production hibernation while dusting off
tools and equipment that they left behind during the pandemic.
They see a perfect opportunity in the horizon; the
OPEC+ will soon feel the pinch, if they tighten the taps excessively at a
critical time for the whole world.
