The rally in oil prices, that got under way on Monday, spilled over into Tuesday, August 24. On the day, Brent soared 3.4%, retracing to $70.47/bbl for the first time since August 12, while WTI surged 3.3% to $67.53/bbl.
According to US news reports, the recent rally may have been due not only to the absence of new Covid cases in China, but also to the fact that the International Monetary Fund will allocate Special Drawing Rights (SDRs) to supplement its member countries’ official reserves. However, reports of an uptick in the number of Covid breakthrough infections among vaccinated people in the US remain alarming and capped the rally.
Oil prices have been correcting slightly lower this morning, with Brent down 0.2% and WTI off 0.25%. That said, both benchmarks continue to hover near recent highs. Our Brent price forecast for today is in the range of $69.8-71.0/bbl.