2020 On January 3, 2020, WTI finished up 2.2 percent for the week at $63.05, the highest since May, after U.S. air strikes in Iraq, with Brent up 2.6 percent for the week at $68.60. Then oil fell for five straight days before rising again; the U.S. "backed away from military confrontation" with Iran, and stockpiles were higher. WTI fell 6.4 percent for the week, the most since July, and on January 13 had its lowest close since December 3 at $58.08. Brent fell 5.3 percent, the most since August, and then reached its lowest close since December 12 with $64.20.
On February 10, oil reached its lowest level in over a year, with the COVID-19 pandemic a major reason. WTI fell 1.5 percent to $49.57, the lowest since January 2019, and Brent dropped 2.2 percent to $53.27, the lowest since December 2018. Russia had not agreed to further production cuts, though OPEC had a plan. Despite a forecast for lower demand, expectations of OPEC action led to three days of gains, with WTI reaching $51.42 and Brent $56.34. WTI ended February 28 down more than 16 percent for the week, the most in 11 years, falling 5 percent to $44.76 on February 28. Brent closed at $50.52. Both were the lowest since December 2018. Warmer than usual weather was one reason but the major factor was concerns about economic slowdown due to COVID-19.
During the 2020 Russia–Saudi Arabia oil price war, on March 8 oil fell over 30 percent. WTI reached $31.13, down 24.6 percent, with Brent $34.36, down 24.1 percent. Both were the lowest since 2016 and the one-day decline was the largest since 1991. On a week when oil fell the most since 2014, Russia rejected plans by OPEC and others to help calm the oil market, and Saudi Arabia was expected to increase production.
With worldwide demand continuing to decline due to COVID-19, oil fell for a fifth straight week at the end of March and any actions taken by Saudi Arabia or Russia would be inconsequential. During the last full week of March WTI fell about 5 percent to end at $21.51, with Brent down 7.6 percent for the week to $24.93. The price of Canadian heavy crude dipped below $5 per barrel.
In the first quarter, the percentage loss was the worst ever, 66.5 percent for WTI and 65.6 percent for Brent. Then on April 2, WTI jumped 24.7 percent to $25.32 and Brent rose 21 percent to $29.94, the biggest percentage increase in a single day ever, in anticipation of significant production cuts. OPEC agreed to production cuts on April 12; these would be greater in 2020 than in future years. U.S. crude supplies had risen for 12 weeks, including the largest increase for a week as of April 10. On April 14, the difference between the front month contract and contracts for later delivery were the most since 2009 for WTI, which traded $14.45 below the September contract. On April 17, May WTI was $18.27 but June WTI was $28.08. For Brent, the June contract was $28.08 while October was $35.95. The difference between the two was less because Brent did not require as much storage capacity. On April 20, the front month contract for WTI fell below zero, an unprecedented event. With the contract for May delivery expiring on April 21, the contract for June delivery became the new front month contract; on April 22 after settling at $13.78, WTI was the lowest since the 1990s.
On May 6 WTI fell after five days of increases, settling at $23.99 a day after a 20 percent jump to the highest close since April 17 with expectations of higher demand as countries around the world eased restrictions. Brent finished at $29.72 a day after a 14 percent jump. U.S. crude inventories were up for the 15th week, but by less than expected.
On May 21, WTI settled at $33.92 and Brent at $36.06, both the highest since March 10. U.S. crude supplies were down for the second week, and OPEC production was down. Positive economic news from Europe and the United States also contributed, although possible tensions with China limited gains.
WTI fell more than 8 percent on June 11, the most since April 27, and ended the week at $36.26 with its first down week in seven weeks. WTI and Brent both ended the week down over 8 percent. OPEC production cuts could not overcome COVID-19 concerns. For the week ending June 19, WTI climbed nearly 10 percent to $39.75 as OPEC made sure countries were complying with goals for output decreases. WTI fell nearly 6 percent June 24 then rose slightly the next day to close at $38.72, while Brent fell more than 5 percent and rose slightly to $41.05, in a week where both have fallen nearly 3 percent. Some U.S. states were delaying reopening, and others were going back to lockdowns. Also, U.S. supplies climbed for the third week while U.S. crude production was down 20 percent since early March. OPEC nations were continuing their production cuts. A negative forecast for the world economy also affected oil prices.
On July 15, after the largest drop in U.S. crude supplies of the year, WTI reached $41.20 and Brent $43.79, the highest since March 6 for both. That same day, OPEC and others said they planned to decrease production cuts in August but FXTM analyst Lukman Otunuga said it might not be the time for that given the chances of more COVID-19 related lockdowns or problems with the world economy.
The first week of August ended with WTI up 2.4 percent to $41.22 and Brent up 2 percent to $44.40. Production cuts took effect on August 1 but U.S. president Trump signed executive orders which added to tensions with China and helped drive prices down.
In the third week of August Brent fell 1 percent to $44.35, while WTI ended the week at $42.34 after the number of U.S. oil rigs rose after falling for three weeks. COVID-19 concerns have led to expectations of lower demand.
Low demand for oil in the U.S., lower U.S. unemployment, a strong U.S. dollar and losses in the stock market contributed to WTI falling nearly 4 percent on September 4 to $39.77, the first time below $40 since July. WTI ended the week down 7.5 percent after four up weeks, and Brent finished the week at $42.66, down nearly 7 percent. Demand for gasoline had recovered more quickly than demand for other petroleum products, and Michael Tran of RBC Capital said supplies fell at a "manic pace" over two months. Other products still had high inventories. Bad news about U.S. unemployment, a strong dollar, lower expected demand, and higher U.S. crude supplies contributed to the second down week for WTI, which fell 6.1 percent to $37.33. Brent fell 6.6 percent for the week to $39.83. This was the first time oil fell for two straight weeks since April.
For the week ending September 25, oil fell for the third time in four weeks due to COVID-19 concerns, fear that the U.S. recovery would slow down, and a higher U.S. dollar. WTI ended at $40.25, down 2.6 percent, and Brent was down 2.9 percent, with the most active contract ending at $42.41.
As a result of U.S. President Donald Trump being diagnosed with COVID-19, WTI fell 4.3 percent on October 2 to finish the week down 8 percent at $37.05, the lowest since September 8. Brent dropped 4.1 percent and 7.4 percent for the week to $39.27, the lowest since June 12. Continued concerns about the pandemic reducing demand also contributed even as U.S. supplies fell. An increase in U.S. inventories and an end to negotiations on COVID-19 relief in the U.S. contributed to another drop on October 7, with WTI down to $39.95 and Brent at $41.51. Increased imports from China helped oil rise by 2 percent on October 13, and expected production cuts by OPEC and allies led to a continued rise on October 14 to $41.04 for WTI and $43.32 for Brent. COVID-19 cases and high inventories, however, made the trend unlikely to continue.
Restrictions in Europe due to COVID-19 and expected delays for production cuts by OPEC and allies caused oil to rise November 2 for the first time in four trading days. WTI jumped from $33.64 to $36.81 and Brent rose from $35.74 to $38.97.
WTI and Brent both reached their highest settlements since September on November 18, with WTI at $41.82 and Brent at $44.34. One major factor was good news about COVID-19 vaccines. U.S. crude inventories rose more than expected, and uncertainty about OPEC and COVID-19 lockdowns contributed to lower prices the next day. Just before Thanksgiving, gas was $2.11, the lowest at that time of year since 2016 and 49 cents lower than a year earlier.
OPEC predicted lower demand on December 14, partly as a result of COVID-19 restrictions in Europe and the United States, and the IEA did the same on December 15. However, demand appeared likely to rise in China, and a pandemic relief package appeared more likely in the United States, while COVID-19 vaccines became available. WTI ended December 15 at $47.62, the highest since February, and Brent reached $50.76, the highest since March.
WTI ended 2020 at $48.52, down 20.5 percent in its second down year in three years but up 7 percent for the month and more than 20 percent for the quarter. Brent finished at $51.80, down 21.5 percent for the year but up 8.9 percent for December and 26.5 percent for the quarter. A weak dollar and lower than expected U.S. inventories kept oil high.
2021 After Saudi Arabia promised further production cuts, WTI reached $51.28 on January 7 and Brent climbed as high as $54.90, the highest since before COVID-19. On January 14, a weaker dollar and an expected COVID-19 relief package helped oil move slightly higher, with WTI at $53.57 and Brent at $56.42, though Europe was experiencing more lockdowns and China had a higher number of COVID-19 cases, both making lower demand likely.
WTI finished the first week of February up 8.9 percent to $56.85 and Brent was up 7.8 percent to $59.34, the highest since January 2020 for both. COVID-19 vaccines were a big reason for positive economic news, though analyst Eugen Weinberg of Commerzbank believed optimism was too high.
On February 16, WTI closed above $60 for the first time since January 2020, with reasons that included Saudi Arabia production cuts, increased vaccine distribution, and the closing of refineries and production cuts resulting from the 2021 Texas power crisis. The Texas situation resulted in contango for WTI for the first time in seven months, meaning futures with earlier dates had lower prices. On February 23, Brent reached $65.37, the highest since January 2020.
After OPEC and others agreed to continue production cuts into April, WTI finished March 4 at $63.83, the highest since April 2019. Brent reached $66.74. Prices were increasing despite high U.S. crude supplies, though the cold weather continued to affect gasoline and distillate.
The third week of March ended with the largest loss for a week since October, with COVID-19 increases in Europe a big reason. WTI had fallen as low as $58.94 in a week where it fell 6,4 percent and lost 7.1 percent in one day. Brent finished the week at $64.53, down 6.8 percent for the week one day after falling 6.9 percent, the most in a day since June. Prices recovered March 19 only because of attacks on Yemen.
On March 24, after a significant decline the previous day due to COVID-19 lockdowns in Europe, the 2021 Suez Canal obstruction caused prices to recover. The news of the fifth straight week of increases in U.S. crude inventory had little effect.
WTI and Brent ended March down nearly 4 percent. With the April 1 announcement that OPEC and other nations would increase production, WTI rose 3.9 percent to close at $61.45 and Brent increased 3.4 percent to $64.86.