Oil prices remained elevated and were still on the rise on Thursday, hitting an 11-month high, as the effects of Saudi Arabia’s surprise announcement about an additional million barrels of crude oil production cuts still has enough juice to withstand civil unrest in the United States and the global pandemic.
At 4:11 p.m. EST, the WTI benchmark was trading up 0.61% on the day at $50.94. The last time WTI traded above $50 per barrel was February. One week ago, the WTI benchmark closed at $48.52.
The Brent crude benchmark is now trading at $54.50, up 0.37% on the day. February was the last time the Brent benchmark sat above $54.
The oil market seems to be focusing more on what Saudi Arabia can do to rebalance oil’s supply and demand than on any political instability brewing in the United States. The oil markets also seem to be discounting the serious impact that new waves of lockdowns will have on the overall demand picture.
While oil prices did slip briefly on Wednesday as a group of President Trump supports stormed into the Capitol, it was unable to tamp down effects of Saudi Arabia’s gift that keeps on giving. The market is for now satiated.
Still, oil prices are multiple dollars per barrel lower than they were in the summer of 2019, and Brent is still trading $20 per barrel below what it was trading at in the summer of 2018 as the pandemic has stripped millions of barrels per day off of the demand side.
Not even swing producer Saudi Arabia has enough juice to offset that demand destruction.