CRUDE OIL SOAR AFTER SAUDI ARABIA SETTLEMENT WITH RUSSIA

Saudi Arabia allowed a deliberate reduction of 1 million barrels per day in February and March to balance an improvement in output from Russia and Kazakhstan. The development will be comparatively mild — 75,000 BPD in February from both countries joined and added by 75,000 BPD in March.

Market analysts are disputing, though, whether the cut will be sufficient to buoy prices. 

The new strain of COVID-19, discovered originally in Britain, scattered across the world, ending in recent severe lockdowns. 

Japan is preparing to launch a lockdown in Tokyo and the neighboring regions as the number of new cases did not stop growing after the New Year. Experts are concerned that demand for crude will be restricted as countries worldwide are putting business ventures on pause, which can damage prices.

Traders also wait for the significant runoff elections for the US Senate in the state of Georgia. If Democrats dominate the Senate, President Joe Biden will drive for stimulus measures without opposition. But Democrats need to get both elections to take the Senate, and currently, it is unclear whether they will be capable of doing so.

In February, futures for delivering WTI crude oil increased by $0.14 (0.28%) to $50.07 per barrel as of 8:52 GMT on NYMEX yesterday. The price touched $50.26 — the highest price for the most actively traded contract after February 26 — earlier, before dropping below the opening level but then growing again.

Brent crude for delivery in March increased by $0.49 (0.91%) to $54.09 per barrel on ICE. February contract for natural gas declined by $0.07 (2.63%) to $2.63 per million British thermal units on NYMEX.