Azeri LT CIF crude oil, exported from Azerbaijan to the world markets, increased $ 1.09 (+2.17%), settling at $ 51.44 per barrel, Report informs.
Oil prices have finally hit $50 last week, a projection that we made back in June this year. The bullish sentiment prevailed in the oil markets over the past week despite a significant increase in US crude oil inventories. Traders are expecting demand to pick up next year as vaccination campaigns are rolled out worldwide. Recent traffic data shows that road traffic is still below pre-crisis levels by 5% in Asia, 20% in Europe, and 40% in the US. The recent growth in US crude inventories is clearly due to increased imports and a decrease in exports. The EIA figures show that demand is slowing in the United States due to reduced mobility and the beginning of the winter season. US refinery runs were currently 2.16 million bpd below their level a year ago.
OPEC+ is set to meet this week to review November production compliance data, and with Brent currently trading above $50, the group has a good reason to celebrate the new year. While OPEC+ is set to add 500,000 bpd of production in January, it is still too early to conclude that OPEC+ will add an additional 500,000 bpd in February. Oil markets remain volatile, and uncertainty continues despite the bullish sentiment seen over the past few weeks. Yet, we expect the group to go ahead with its pre-set plans if prices continue to trade at this level.
The largest risk for prices currently is slowing demand and a simultaneous increase in supplies, despite vaccination campaigns. A new bout of lockdown measures in Western Europe has markets worried that optimism about the recovery could have been premature.