On Tuesday, both US WTI (West Texas Intermediate) and UK crude oil futures’ prices soared more than 2 per cent and breached their highest levels in more than a year as major oil producers had shown that almost all of OPEC+ member states had held on to their commitments to trim supply in light of a sharp rise in US drilling rigs, numbers of which had increased for a straight eighth month in a row in January 2021.
In point of fact, in the day’s rise in crude oil futures’ prices was largely galvanized by an OPEC report that showed the crude outputs of OPEC+ member states rose less than anticipated last month, while a high-flying optimism over another round of trillion-dollar US stimulus bill added to further bullishness.
Nonetheless, crude outputs from the 14-member OPEC (Organization of Petroleum Exporting Countries) pact rose for a seventh straight month in January, but missed an analysts’ estimates which in effect had offset worries of a potential supply glut, nonetheless, industry analysts were quoted saying that the gains were unlikely to last longer amid a rise in US drilling rig counts since crude oil prices have been witnessing a maverick upturn since later last year.
Aside from the OPEC nations, oil outputs in Russia and Kazakhistan, two of the closest allies of OPEC-member states, both fell in January.
Crude oil rises as OPEC nations limit output
Citing statistics, in the day’s commodity market round off, UK crude futures’ prices ended up the session 2% per cent higher to $57.46 a barrel after touching a session-high of $58.05, Brent crude futures’ highest level since January 2020, while US WTI crude surged 2.3 per cent to $54.76 after hitting an intra-session high of $55.26, its highest level in more than a year.
Meanwhile, addressing to US Senate’s latest hint to adopt another stimulus package in a near-term outlook which in effect would likely to step up business spending in manufacturing sector, a director of energy futures at Mizuho in New York, Bob Yawger said, “You got the U.S. economic stimulus package that no one thought we would get”.