Crude oil futures posted the biggest one-day gain since the start of 2016 on Monday. Futures prices rose sharply after falling during most of January.
On Friday, January 22nd, March Brent crude soared 10% to $32.27 a barrel on the London’s ICE Futures exchange. Meanwhile, crude oil for March delivery jumped 9% on the New York Mercantile Exchange to end the week at $32.19 a barrel.
In general, crude oil prices are still very volatile. Thus, on Wednesday, January 20th, crude oil for February delivery was trading below $27 a barrel.
Economists say the crude oil market is still bearish, weighed down by oil supply glut and Iran’s return to the market.
With prices falling below $30 a barrel, the rebalancing of supply and demand in oil markets is likely to take place earlier than expected on the back of reduced investment in oil production and the close of unprofitable oil projects around the world.
A rise in crude oil prices on Friday was also driven by the data on the number of active drilling rigs in the United States. The latest report from oil field service company Baker Hughes showed another decline in the number of US rigs in use.
