Oil prices recorded their fourth successive weekly gain on positive vaccine news and hopes for a sooner-than-expected recovery in demand.
Brent crude rose to $48.18 per barrel, the highest level in eight months.
Despite the rally, market fundamentals remain unchanged. Instead, improving sentiment tethered to hopes of an effective vaccine is moving the market.
At the end of October, the price of Brent crude was $37.40 per barrel, while November is about to end with the price of Brent crude at $48.18 per barrel.
Meanwhile, there are indications of strong consumption emerging from refineries in Asia, but Europe and the US remain sluggish.
The current price of Brent crude, approaching the $50 barrier, is not only the highest since early March, but is also close to where the market was pre-pandemic.
This has surprised many observers with more bearish expectations and a consensus that a recovery would not emerge before the second quarter of next year.
Brent crude approaching $50 represents an important psychological barrier for increasing speculative activity. Now attention is focused on tomorrow’s gathering of oil producers.
If the current OPEC+ output cuts of 7.7 million barrels per day (bpd) are extended or deepened, then this will boost bullish sentiment and help to accelerate a recovery. If not, the bears may prevail.