On March 4, the WTI crude oil futures market in the United States rose sharply, with the settlement price of main contract at $63.83/barrel, or 2.55 US dollars or 4.16%. Brent crude oil futures market prices rose sharply, with the settlement price of main contract at $66.74/barrel, or 2.67 US dollars or 4.16%. WTI and Brent oil prices rose more than 4 per cent, reaching their highest in more than a year, mainly because OPEC and its allies agreed to maintain production basically unchanged in April, and Saudi Arabia said it would extend plans to voluntarily cut production by 1 million barrels per day.

Just on the previous trading days, international oil prices fell for three consecutive days, with oil prices falling nearly 6 per cent between February 26 and March 2. Main reason: the market forecast that opec+ might announce production increase at a recent meeting, because its member countries still have differences in production control policies. The mainstream view has previously thought that the probability of an increase of 500000 barrels per day agreed in April is relatively high. In addition, after the cold weather in the United States, the US shale oil production is expected to rise, and the atmosphere of oil price is relatively heavy, and all prices have been corrected.

On March 3, the market began to turn the wind direction, mainly due to opec+ releasing a signal of continuous production reduction, and oil price rose by less than 2%. But affected by the snowstorm in Texas, the plant operating rate last week was low, which resulted in a large accumulation of crude oil inventories, which restricted the increase of oil prices. US crude oil inventories unexpectedly increased by 21.663 million barrels to 484.6 million barrels last week, the highest weekly growth rate, and a short-term pressure on oil prices, according to EIA data released on Wednesday.

Yesterday, opec+ meeting results finally came into effect, the organization agreed to extend oil production reduction to April, OPEC leader Saudi Arabia said it would extend the plan of voluntary production reduction of 1 million barrels / day, and decide in the next few months when to gradually cancel the reduction. In addition, Russia and Kazakhstan were allowed to increase production by 13000 barrels / day and 20000 barrels / day respectively. The meeting results exceeded market expectations and pushed oil prices to a year’s high.

What will be the oil price going to do in the later period?

The business agency looks like the policy is in place and the oil price is likely to continue to rise in the near future. In the medium and long term, with the weakening of the impact of the epidemic, the global economic recovery is basically irreversible, and the demand for oil will continue to increase, especially in the fields of air and transportation. On the supply side, opec+ production control policy may turn with the acceleration of economic recovery, and the probability of increasing production in the later period is very high; in addition, high oil price will stimulate the increase of shale oil in the United States, and the supply and demand of crude oil may seek new balance under the background of economic recovery, and oil price may maintain a high level, but if the agency expects to break through $100, it may be wishful thinking.