Oil in London climbed above $50 a barrel for the first time since the pandemic ground the global economy to a halt in a remarkable rally that few predicted would happen this soon.
Global benchmark futures surged 2.8% Thursday, reaching a nine-month high. The rebound represents a startling turnaround for a market that was brought to its knees earlier this year by an unprecedented loss of demand. With places to store unused oil running out, OPEC and its partners collaborated to stanch outflows and stabilize markets while the world awaited a vaccine.
Announcements last month from Pfizer Inc. and others that safe vaccines could be rolled out by spring boosted the outlook for global consumption. Asia is continuing to lead the rebound in physical demand amid robust purchasing by China’s private refiners. The U.S. dollar also weakened, which raised the appeal for commodities priced in the currency and helped thrust Brent past $50.
“I am a bit surprised that it happened now,” said Bart Melek, the head of global commodity strategy at TD Securities. “I have been advocating $50+ Brent, but I thought that would happen after we see inventories and demand look better.”
It’s possible the market is getting ahead of itself though, with key technical indicators signaling benchmarks are overbought and U.S. inventories recently piling higher.
No comments:
Post a Comment