Crude oil tops at $70 over global economic recovery

The energy sector has been one of the best performing sectors of the market this year, as the faster than expected global demand recovery supports the higher oil prices and the bullish momentum.

The price of the Brent, the international crude benchmark, rallied to 72 dollars per barrel, hitting a 2-year high, whilst the US-based WTI crude rose back to 70 dollars for the first time since 2018.

Both oil contracts have risen by nearly 40% this year as the successful vaccination campaigns and the removal of social restrictions, have triggered a powerful recovery in global economic activity, driving the demand for petroleum products higher.

On the upside, OPEC group, together with other top global oil producers, have agreed to maintain their existing pace of gradually easing of supply restrictions, as the global oil demand is expected to pick up in the second half of 2021.

On the downside, investors have been reluctant to push the prices above 70 dollars, on the back of a possible return of Iranian oil supplies into global markets as part of a restored nuclear deal with global powers.

With oil prices returning to pre-pandemic levels, the energy sector has massively outperformed Wall Street this year. The shares of some of the largest energy companies such as Conoco Philips, Exxon, and Valero have surged up to 50% in 2021, regaining their lost ground from the pandemic.