It was about a year ago on April 20, 2020 when the West Texas Intermediate (WTI) crude oil price benchmark closed at negative US$37.63 per barrel.

The CODID-19 pandemic, a price war between Russia and Saudi Arabia, global storage tanks at or near capacity and the timing of futures contracts pushed prices down and led some sellers to pay buyers to take the crude off their hands.

The end of the price war and production cuts—including here in Alberta—helped stabilize prices and kept the global oil market from temporarily collapsing.

Fast forward to today and rising demand, positive economic forecasts for the U.S. and China, declining global crude stockpiles and the expectation that vaccines will enable a broad-based economic recovery have bolstered benchmark prices even as the pandemic continues to disrupt economies around the world.

WTI has averaged almost US$62 per barrel since the start of March while the Western Canadian Select benchmark has averaged just under US$52 over the same period.

Oil prices are, of course, volatile and could see some short-term erosion if markets react to increasing COVID-19 cases in places like Brazil and India.

As noted in a previous Owl, global demand is not expected to return to pre-pandemic levels until next year and robust oil prices still depend on OPEC refraining from flooding the market.

OPEC’s decision to keep supply and demand in balance may come down to whether or not U.S. shale producers ramp up production in response to the stronger price environment.

Answer to the previous trivia question: According to the World Bank, 44 per cent of the global population lives on less than US$5.50 per day.

Today’s trivia question: When was the Western Canadian Select crude oil blend created?