Oil futures on the NYSE exceeded a price of $70 per barrel for the first time in nearly a month, thanks to sustained investor confidence. There seems to be a widespread consensus that the oil market can withstand blows resulting from additional supply from OPEC+ as well as the impact that Hurricane Ida had on the U.S. Gulf.
A major driver for the upward surge in price is the dollar’s recent decline, one day after ministers from OPEC agreed on an output increase in October in order to meet investors’ demands. At the same time, 94% of crude production on the Gulf of Mexico has been halted in the days following the hurricane.
Rystad Energy’s head of oil markets Bjornar Tonhaugen made the following remark in a note: “After the OPEC+ meeting ended without surprises, oil prices are rising as the crude stock draw has raised confidence in the market.”
Since reeling from the initial effects of the coronavirus pandemic, crude oil has rebounded by 40% this year. This has been helped by OPEC+’s decision to gradually restore its supply after suspending it during the last year, when the pandemic hit its peak.
