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.
