Oil price comes off the boil as the pandemic lingers

Brent crude oil prices rocketed by 85% between the end of October and mid-March but have since retreated. Trading above $62 a barrel as of the middle of this week, crude is 10% off its recent highs.

Brent crude had its worst week since October last week, tumbling by 7%, say Emily Gosden and Tom Howard in The Times. Renewed virus restrictions in Europe are weighing on the short-term demand outlook. The fall shows “how premature” bullish talk of a return to $100 a barrel has been, says Bjornar Tonhaugen of Rystad Energy. Oil prices are still being “artificially” propped up by “Opec’s reduced supply” deal.

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That’s partly because they have a new competitor: traders say that Iranian oil exports to China are on the rise, in defiance of US sanctions, report Myles McCormick and David Sheppard in the Financial Times. The price pullback shows that the recent rally had become “overextended”. Still, many analysts think that global oil demand will still rebound sharply over the coming months. Goldman Sachs forecasts Brent crude prices of $80 a barrel come the summer.

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Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.