According to Dr Nakhle, we haven’t seen any surprising factor that would stop this kind of rally, at least not yet. Demand is on the mend, stockpiles of crude that ballooned last year are shrinking and the Organization of the Petroleum Exporting Countries (OPEC) is holding millions of barrels a day back from the market. The cold snap just helped to extend a monthslong recovery supported by the production curbs of OPEC and its partners, led by Russia.
The key question for oil traders now is whether the cartel opts to relax the cuts at a meeting in March. Saudi Arabia will likely resume production of the million barrels a day it decided to take off the market in January, now that prices are above $60 a barrel, boosting global supplies.
“New Opportunities 2021: Some optimism for oil markets“, Dr Carole Nakhle, Feb 2021
“Saudi Arabia’s surprise unilateral production cut“, Christof Rühl, Jan 2021