Oil harvest an increase of 5% last week and a 20%increase in February 2021-02-28T18:10:59 Oil harvest an increase of 5% last week and a 20%increase in February Oil harvest: This month witnessed a strong performance for the two main benchmarks of oil as they reached their highest levels in nearly more than a year, as they increased by more than 20%. Brent crude oil price was above $60 a barrel for the first time in a year on 2/8 and West Texas Intermediate also surpassed $ 60 a barrel on February 12. At the end of February 26, Brent crude for April delivery retreated by 75 US cents or 1.2%, to trade at 66.13 a barrel. US crude oil fell to 61.5 US dollars a barrel. However, oil prices rose by more than 20% during the entire month of February. In spite of Friday’s drop in prices, both Brent and West Texas Intermediate are on track to rise by about 20% this month as markets is facing supply disruptions in the United States of America while demand for oil improves with vaccine deployment. Oil achievements are successive Brent and WTI rose by more than 5% this week. February is the fourth month which is witnessing a rise in both benchmarks in a row. What is more impressive, is that since the beginning of November and the first announcement of Covid-19 vaccines, the two raw materials have earned more than $ 25 each, an increase of nearly 80%. Why did oil prices increase in February? Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to continue reducing production in February and March 2021. Saudi Arabia which is the largest oil exporter voluntarily pledged to reduce production by one million barrels a day of quotes committed in OPEC+ during February and March 2021. Refineries in Texas Refineries in Texas, the largest oil producer in the United States of America, have halted about a fifth of the country’s oil processing operations amid power outages and the unusually cold weather. It is estimated that it has reduced more than 4 million barrels of crude oil a day. This is equivalent to 40% of total daily production. Global oil prices Global oil prices sharply rose in the context of the market recording many positive signs for the US economy, especially the increase in demand for crude oil from China. OilX Energy Analysis OilX Energy Analysis said that China’s imports average of crude oil amounted to 11.12 million barrels a day in January 2021. This represents an increase of over 18%( around 1.74 million barrels a day), compared to the average in December 2020. Oil prices sharply rose again after news that US crude inventories had been sharply fallen. In addition, investors are expecting the possibility of a global economic recovery when United States implements a US $ 1.9 billion economic support package which will boost fuel demand. In addition, crude oil prices were boosted by fears that crude supplies from the Middle East would be disrupted amid escalating tensions in the region at the end of attacks on Saudi airports. Next meeting of OPEC Investors hope that the Organisation of Petroleum Exporting Countries (OPEC) and its allies will agree to return more supplies to market, next week. According to Reuters, British multinational HSBC, through a note, highlighted that “reduction in originally planned decrease will mean an increase in the supply of 2.25 million barrels a day compared to March levels”. Note added: “We believe that market fundamentals could probably absorb that amount during the second quarter, if demand sufficiently recovers but announcing an immediate increase of this size could seriously scare market”. For their part, analysts of one of the oldest financial services companies in the world, JP Morgan, in a statement, said facilities with a refining capacity of about 4 million barrels a day remain closed. In order to fully resume operations, it takes a period of time that can last till March 5. What is oil waiting in March? Tomorrow, March will start. At the start of a new week of trading, oil is expected to follow the same path next month, especially there are a success of vaccination campaigns in reducing the number of Coronavirus “Covid-19” infections recently in the world. This means that life is approaching to return to its nature. The aviation sector may be the major influence of oil demand, but if airports open next March and if there is a return of domestic and foreign air traffic between major countries, this will mean an increase in demand for oil, and this by its turn will support its prices. According to many experts, a level of $ 70 a barrel is not far this month and it can be reached, although others expected that oil will make corrective bearish moves during March. This matter will also depend on several factors, including: OPEC’s next decision, whether it will remain its previous decisions or it will take new ones. An increase in production would weaken oil prices, but if it remained at the same levels, this would mean support for oil prices in the near term. Evest is following up on both reports of US oil inventories which are published by the American Petroleum Institute on Tuesday every week and the official report of the US Energy Administration which is published on Wednesday. US stimulus package worth 1.9 trillion dollars. Iran’s return to negotiations with the new US President regarding reducing sanctions and starting return of Iranian oil to markets. Whatever happens, oil has been doing well starting from November till February. We expect that oil will be continuing this performance at least as long as vaccination campaigns against Covid-19 are on its right track.