Oil prices fell on Monday after pushing above $70 a barrel for the first time since the start of the coronavirus crisis, with support from US stimulus and an attack on Saudi Arabian oil sites countered by global inflation fears.

Brent, which initially surged to $71.38 a barrel, its highest since January 8, 2020, slipped by $0.73, or 1%, on the day to $68.63 by 1500 GMT. The benchmark is still hovering around its highest level in more than a year.

US West Texas Intermediate (WTI) crude was down $0.63, or 0.9%, at $65.46 after touching its highest since October 2018 at $67.98. The US Senate on Saturday passed President Joe Biden’s $1.9 trillion Covid-19 relief plan, lifting prospects for the economy and fuel demand that has been pummelled by the pandemic.

Adding support, Houthi forces in Yemen launched drones and fired missiles at Saudi Arabia, including a Saudi Aramco facility at Ras Tanura that is vital to petroleum exports. Riyadh said there were no casualties or loss of property.

“The spectacular oil price ascent deserves some cautious thinking … Our balances indicate that the market is already tight enough to achieve a balanced recovery,” said Rystad Energy oil markets analyst Louise Dickson.

Published in The Express Tribune, March 9th, 2021.

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