Oil benchmark price rose by more than 1% on Monday amid uncertainty about the prospects for a full recovery of black gold production in the U.S. Some oil companies have already restored energy production in Texas, but it is still unclear when to expect the recovery of production in the usual volume.

The price of April Brent crude oil futures jumped 1.29%, to $63.72 per barrel. The price of April WTI crude oil futures rose by 1.13% compared to the level at the close of the previous trading, to $59.64 per barrel

Recall that the state of Texas recorded severe frost which is not a typical climate of this region. The bad weather affected about 300,000 people who were left without electricity and water.

It should be noted that the previous week, February 15-20, was characterized by noticeable nervousness and strong volatility in the oil market. It was a kind of roller coaster - from a rapid takeoff to a stirring sharp fall. The beginning of last week was marked by a steady rise in the cost of a barrel, which eventually exceeded the $65 level. Later, the price went down and corrected to $63, while the price of WTI oil fell to $59 altogether.

The freezing of energy deposits and unprecedented frosts for oil-producing states determined a large-scale drop in black gold production in the U.S. The reduction in production amounted to almost 4 million barrels, that is, approximately 40% of the American and 4% of global oil production. The reduction in production and the collapse of energy supplies have greatly increased the demand for it and have set a price maximum unprecedented in the past year.

The news about the registration of an increasing number of vaccines from various reputable manufacturers in the world also played a role, promising a resumption of former economic indicators after a full-scale vaccination of the population against coronavirus. The energy demand was fueled by the forecasts of experts from global investment banks, who promised an increase in the price of black gold to $80 this year against the backdrop of government support in the U.S. and Europe.

However, the end of last week was marked by a correction in the oil market. In the U.S., the cold snap began to gradually recede, and at the same time, the emotions of market participants became sober. Saudi Arabia, among other things, announced that it is going to unilaterally increase oil production. As a result, on February 19, the price of the benchmark Brent crude fell by 1.6%, that is, to $63, while the price of WTI oil fell by a significant 2.46%, to $59. The next day, February 20, the barrel quotes continued their decline.

Today, there is uncertainty in the energy market, which is associated with the fact that some oil companies, including Marathon Oil Corp., Devon Energy Corp., and Verdun Oil Co., do not promise that it will be restored in full, despite resuming production in Texas. Experts believe that the normalization of oil production in certain places cannot be realized quickly: the necessary repair work at production will take a lot of time.

It should be noted that the next monthly meeting of the OPEC+ countries will take place on March 3-4, which will become the main event for the oil market. If the cost of hydrocarbons continues to be high, the alliance members may well change their agreement and increase production quotas. The increase in production is beneficial to the economies of those countries that are not members of OPEC+. Supply will recover, but demand is likely to remain limited by the current restrictions in consumer countries.

What the oil price will be in the future will become clear after the OPEC+ decision is announced. The estimated scale of vaccination and the specific U.S. fiscal stimulus allocation is also of great importance.

If this year, the borders finally begin to open, and tourism and flights recover, then in the summer, the price of oil may well approach the $67– $70 mark. And any negative news regarding the pandemic, as well as a significant increase in oil production, can lower Brent quotes below $60.