Oil prices are rising to pre-pandemic peaks again
Having reached an all-time low last year, the price of oil has returned to its pre-pandemic levels.
Recent increases in crude prices and the rapid drawing down of visible stockpiles will undoubtedly lead to calls for a more rapid raising of production targets than was envisaged in December.
Demand has been rising in parts of the world, particularly Asia. “We are quite optimistic about what it is that we are seeing in China,” Royal Dutch Shell chief executive Ben van Beurden said last week.
Other factors have also played their part to push up prices such as efforts by oil-producing nations, particularly Saudi Arabia, to limit output.Commercial oil stockpiles in developed nations of the Organisation for Economic Cooperation and Development (OECD) are coming down. The group now expects them to fall below their five-year (2015-2019) average by August a key target for Riyadh.
Russia is not an OPEC member and it took a lot of wooing to get it to join the wider alliance. Moscow may well want to claw back market share relinquished through the supply cuts more quickly than is comfortable for Saudi Arabia and others.