Crude oil has gained five weeks in a row, almost undetected by investors who are completely focused on the stock market surge fueled by AI stocks and the significant reduction in inflation.
Such a winning stretch has not occurred in the oil market in over a year and a half, with the most recent instance being eight weeks of advances between December 2021 and February 2022.
On Friday, the West Texas Intermediate (WTI) crude oil surpassed the $80-per-barrel milestone, reaching levels not seen since April 19, 2023.
After falling as much as 45% between mid-June 2022 and mid-June 2023, oil prices have rebounded strongly this month.
Crude has risen by 14% month to date, currently boasting the second-best monthly performance in 2023, only behind January’s 16%, with one more session to go.
Oil prices have risen significantly as a result of a number of variables affecting both supply and demand.
On the supply side, Saudi Arabia and Russia have made efforts to reduce output, causing oil supplies to tighten. Furthermore, OPEC+ has indicated its willingness to take additional initiatives to assist the oil market.
On the demand side, Chinese officials have pledged to revive its lagging economy, raising hopes for a spike in domestic petroleum consumption. The U.S. has also pledged to buy Strategic Petroleum Reserve to refill stocks at over 40-year lows.