Tuesday, February 9, 2021

Crude Oil Retreats from Year’s Highs

Prices for crude oil reached the highest level since January 2020 during Tuesday’s trading session. The rally was mostly a result of the positive market sentiment, caused by the outlook for fiscal stimulus in the United States and reports about the effectiveness of coronavirus vaccines. The optimism hurt the dollar, bolstering commodities priced in the US currency. But it looks like the optimism has been waning as traders has been turning towards safer assets. Consequently, crude declined, though the Brent grade has still been trading above the $60 level at the time of writing.

Besides the market sentiment, oil had its own reasons to rally. OPEC+ oil production cuts, in particular the decision by Saudi Arabia to cut its output beyond the agreed amount, continued to support prices. On top of that, supply from Libya has been disrupted due to the ongoing strike of the Petroleum Facilities Guard at the country’s export terminal over delayed salary payments. Meanwhile, export from Iran still has troubles reaching the global market because the United States maintains sanctions against the Middle Eastern nation.

Futures for delivery of WTI crude oil in March dropped by $0.38 (0.66%) to $57.59 per barrel as of 11:41 GMT on NYMEX today. Brent crude for delivery in April fell by $0.21 (0.35%) to $60.35 per barrel on ICE. March natural gas sank by $0.07 (2.46%) to $2.81 per million British thermal units on NYMEX.

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source https://www.earnforex.com/commodities/crude-oil-retreats-from-years-highs/