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Reminiscences back to March 6th 2020, Saudi Arabia and Russia failed to agree on a deal to restrain production.


N ow Saudi Arabia and other producers are curbing output as demand rises. The price of Brent crude, the international benchmark, briefly climbed above $70 a barrel during March 8th for the first time since May 8th for the first time since May 2019.

The surge comes amid a broader boom for commodities from copper to corn, as Chinese imports rise and supply remains constrained. But oil’s climb has been whirling. In April 2020, the oil price for Brent went downwards below $20 a barrel and one American futures contract briefly became worthless. However, the price in late October skyrocket and has risen by nearly 100%. By the third quarter, reckon analysts at Goldman Sachs, a bank, predict the price to hit new record at $80.

Three successive events contribute to the increase of oil prices this month. On March 4th the Organisation of thePetroleum Exporting Cuntries (OPEC) and its allies left the market in the state of shock by agreeing to extend production cuts to April. Then subsequently on the 6th March, America’s Senate passed a $1.9 trn stimulus bill, which should increase economic activity in the country that remains the world’s most voracious for the consumption of oil. Fear of supply disruption have cost oil prices to increase further.

When the news broke, a price war ensued, with the two giants unleashing millions of barrels of crude just as covid-19 fast forwarded the lockdowns and oil demand dried up.