- Saudi Arabia, Russia and other oil producing countries have agreed to start pumping more oil next month.
- The production of oil is to take place even as the coronavirus pandemic continues to cloud the outlook for demand.
- Producers said they intend to increase output by 500,000 barrels per day beginning in January.
- Oil prices have been buoyed by optimism about Covid-19 vaccines, which are expected to usher in an explosion of demand.
According to a recent CNN article, more oil is to hit the market, writes Julia Horowitz.
So why have oil prices pushed even higher ?
UBS energy analyst Giovanni Staunovo thinks that there’s a simpler explanation for the price jump: As with stocks, prices have been buoyed by optimism about Covid-19 vaccines, which are expected to usher in an explosion of demand.
Oil prices are also getting a boost from a weaker US dollar, which makes crude cheaper for buyers in emerging markets, he told me.
Brent Oil could drop
UBS forecasts that Brent crude could drop to $45 per barrel by the end of March.
Staunovo thinks prices can rise to $52 by the end of June, however, and $57 per barrel by the end of September — lifting struggling energy firms and providing clarity on the path forward.
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Source: CNN
