The oil market has good growth potential

Oil prices continued to rise on Tuesday: Brent has reached $56 per barrel, WTI – $53,25. At the same time, the potential for further strengthening remains.

Some days earlier the information appeared that Iraq plans to reduce oil production to 3.6 million barrels per day, which will be compensation for unfair fulfillment of the terms of the OPEC + deal in 2020. And if Iraq keeps its promises, then the volume of production in the country will decline to the lowest level since 2015.

An additional factor in the rise in oil prices may be the interruptions in exports in Libya, caused by delays in the payment of salaries to the security personnel of the oil facilities. Before these conflicts, Libya saw a rapid recovery in oil production: in December, production reached 1.2 million barrels per day, while in August production volumes were less than 100 thousand barrels per day.

Also, market participants continue to monitor the spread of Covid-19 in the world and the progress of negotiations on new economic stimulus in the United States. US President Joe Biden is pushing for the early adoption of a new $1.9 trillion fiscal stimulus package. The inflow of new money into the US economy will put pressure on the dollar, which, in turn, will act as a factor supporting Brent quotes.