At 04:27 GMT on Monday, Brent crude price went up by $1.09, a rise in 1.8%. WTI crude, meanwhile, gained $1.28. Analysts may think the stimulus package announced by the Biden administration and the hopes of success of the vaccination programmes across the world are behind the spike in crude price in the morning hours in Asia.
It, however, was triggered off by a drone operation aimed at Saudi Arabia by Houthi rebels. According to Saudis, a drone, laden with explosives, was detected by the Saudi interceptors on Sunday night; they say it was destroyed on detection in the Saudi skies.
This has been the pattern whenever Houthi drones are detected in the Saudi airspace; analysts are more worried about the potential for a flare-up between Iran, the backers of Houthi rebels, and Saudi Arabia.
Since the drone was destroyed by Saudi Arabia before it damaged the intended target, markets breathed a sigh of relief and the price movements since then reflect the trend.
Asian shares rose rapidly, shortly after the short-lived spike, triggered off by a knee-jerk reaction on the part of investors. Investors are confident that the success so far on the vaccine front will continue to snowball in the coming weeks and so will the traffic on the roads.
Moreover, a strong demand from China and India is back on track, with their economies being back to where they were a year ago.
All in all, there is plenty of encouraging news for oil investors to digest at the moment and the markets reflect the trend.