The recent crude oil moves seemed to foreshadow what the Fed said yesterday about the U.S. economy and jobs market. The economic outlook and jobs are improving, leading to higher energy prices.
Oil rallied despite a negative American Petroleum Institute (API) report on more positive vaccine news in the U.S. and China and a $916 billion Covid-19 relief offer.
Global oil markets are in flux as we all wait to see if OPEC and their favorite co-conspirator Russia can agree to a production deal and avoid another all-out price war.
The drama is putting the oil bull market in jeopardy, and if it weren’t for the fact that the UK approved the first Covid-19 vaccine in the Western world, the oil market might have been hit harder.
Divisions continue to separate the OPEC+ cartel, and they had to delay the meeting that was supposed to be a rubber stamp on a 3-month extension of cuts.
The oil market has widely priced in a three-month extension while holding out hope of a more dramatic OPEC+ surprise. Even Vladimir Putin plays it coy by saying that he has no plans to talk to Saudi Arabia ahead of the OPEC+ meeting.
More news on Covid-19 vaccines is raising oil demand prospects in the short term and the longer-term has oil trading at a 3-month high, and the best is yet to come.
