On Tuesday, both US and UK crude oil futures’ prices had mushroomed to their highest levels in nearly a year as a growing investors’ bet on a squeezed supply in a near-term outlook appeared to have catapulted black gold contracts’ prices.
Aside from that, global stocks had also edged higher in line with crude oil contracts over optimisms that a larger pandemic stimulus might be unveiled following the US President-elect Joe Biden’s inauguration next week.
In point of fact, an unprecedented rise in factory activities in both China and the US later last year, two of the world’s largest economies, alongside a potential squeezing on crude oil supplies in a near-term outlook over expectations that the US crude inventories would face off a sharp decline in context of a clattering rise in pandemic cases across the country, had acted as major market movers in the day’s commodity market.
On top of that, a voluntary output cut of 1 million barrels per day from the OPEC-kingpin had certified a likely downward spiral in crude oil futures’ prices further. Concomitantly, a spike in political tension in Washington ahead of a takeover of White House by a Biden Administration with FBI warning of a mass-scale armed protest from pro-Trump Republicans this week, added to further strains on crude oil futures’ outlook.
Crude oil rises to 11-month-peak on fears of a decline in supplies
Citing statistics, in the day’s commodity market winddown, the US West Texas Intermedia crude oil futures’ prices gained 1.76 per cent to $53.17 a barrel, while UK crude futures’ prices surged 1.62 per cent to $56.56 per barrel.
Meanwhile, underscoring an apparent supply shortage in global black gold market, Commerzbank analyst Eugen Weinberg said in a client note, “Saudi Arabia in particular is ensuring, through its additional voluntary production cuts, that the market is undersupplied ”.