Global oil prices fell by 6 per cent on 13 April. The Energy Information Administration reported a  large stock draw of US crude oil and a rise in the demand of fuel following ‘lingering concerns’ over the strength of recovery.

The sudden drop in global oil prices has been linked to renewed lockdowns across Europe and the impact of the Paris Agreement on the industry. Amongst other EU member states, Germany extended its national lockdown until 18 April. Europe’s struggle with the extension of COVID-19 measures, including travel bans, have hurt the demand projection for crude oil.

The accumulation of stocks during lockdown and the increasing willingness of stakeholders to comply with the Paris Agreement following President Joe Biden’s decision to re-join have also contributed to unfavourable projects. Bullish sentiment is persistent, however: banks are confident that the oil market will continue its upward trajectory.

The international crude oil market has risen by 80 per cent since November 2020. Whilst Morgan Stanley commented on its anticipation of falling inventories, Goldman Sachs described the recent market fluctuation as a ‘transient pullback in a larger oil price rally’. Bullish confidence in the market does not seem to have been dented by the recent price drop. Research from Wood Mackenzie, however, warns of the potential implications of ‘the risks associated with robust climate-change policy’ on the oil industry.