After bouncing off support levels, oil prices rallied sharply on Monday, August 23, with Brent spiking 5.5% to $68.14/bbl, and WTI shooting up 5.7% to $66.35/bbl.
The rally was driven by news that China reported no new locally transmitted cases of Covid-19 on Monday, for the first time since July. In addition, Hurricane Grace, which caused great damage to Mexico and parts of the southern states of the US over the weekend, caused oil output in the Gulf of Mexico to be partially halted. This weather event was also a driver behind yesterday’s sharp rise in oil prices.
Prices are still on the rise this morning, and by the time of writing Brent was up 1.32% at $69.66, while WTI was trading 1.13% higher $66.38. Our Brent price forecast for today is in the range of $69-70/bbl.