New York-traded West Texas Intermediate (WTI) crude oil prices surged to a two-week high on Friday, settling at $75.67 per barrel, up $1.30 or 1.8% for the day. The rally in prices was driven by a session high at $75.71, which marks the highest level since mid-March. Over the week, WTI prices rose by 9.2%, which helped to recover some of the losses incurred in the previous week.
The global market experienced a sharp decline in crude oil prices three weeks ago, which saw WTI prices drop by 13%. However, the past two weeks have seen a significant recovery, which has slashed 11% off the 13% drop WTI experienced. The rally in crude oil prices is attributed to a combination of factors, including a surge in demand as economies reopen and optimism about the impact of vaccination programs on global economic growth.
Analysts also point to a decline in crude oil inventories, which has led to an increase in demand for crude oil. The recent blockage of the Suez Canal also contributed to the recovery in crude oil prices. The blockage led to a temporary halt in crude oil shipments, which led to a decline in global crude oil supply, thereby driving up prices.
The surge in crude oil prices has also been attributed to the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decision to maintain production cuts. OPEC+ announced that it would maintain production cuts until April, which has helped to stabilize crude oil prices.
In conclusion, the surge in crude oil prices is a welcome development for oil-producing countries, which have been hit hard by the decline in prices over the past year. However, the surge in prices is also a concern for consumers, who may face higher prices for gasoline and other oil-related products. Nonetheless, the recovery in crude oil prices is a positive sign for the global economy, which is slowly recovering from the impact of the COVID-19 pandemic.