There are two main drivers behind the oil price rally of the last few weeks. The first and main one is positive vaccine developments. The second one is related to OPEC and OPEC+ meetings, as investors are expecting an extension of the current cuts, which seems already priced in by the markets.
Is there too much enthusiasm about the vaccine? We do not know this yet. We should anyway remember that we are not talking about a single vaccine, as there are now many big pharma companies that have recently announced that they have effective solutions against Covid-19. In other words, markets are pricing this not as a sporadic attempt to mitigate the virus, but as a well-structured plan which should be able to seriously mitigate the number of people affected by this virus and put an end to the long series of lockdowns seen in the last few months.
From a technical point of view, WTI climbed above the previous top of August, reaching a new post-Covid high just above $45. The main trend remains bullish, while stocks of oil sector are recovering some of the ground lost in the previous months.
