Oil continued its rally following a 2% jump on Tuesday after Saudi Arabia said it would be raising the price of oil for buyers in the US and Europe. Hopes of increased demand as economies reopened also buoyed prices.

Both global and US crude benchmarks rebounded as President Joe Biden pressed ahead with the US economic stimulus, in addition to OPEC production levels being less than expected. 

Brent crude oil jumped by over 5% at $58.46 a barrel on Wednesday after its fourth straight day of gains. West Texas Intermediate rose by 6% to $55.69 over the same time period.

Saudi Arabia will voluntarily cut 1 million barrels per day from the start of February to the end of March, in line with the OPEC pact. 

Analysts ascribed the bounce in oil prices to the US’s willingness to implement its long-awaited coronavirus stimulus package, in addition to continued cooperation by producers on the supply side. 

“You got the US economic stimulus package that no one though we would get,” said Bob Yawger, director of energy futures at Mizuho in New York. 

“The oil market continues to look for better days ahead with an increasing rollout of the vaccine, encouraging demand, while OPEC continues to restrain production,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

The oil industry was one of the worst affected by the pandemic during 2020 with the price of crude oil falling as low as $20 per barrel after lockdowns cut demand. 

In this morning’s trade Shell’s share price was largely flat, down to 1,330p. The Shell share price was as high as 1,503p in January 2020. 

This was despite swinging to a $21bn loss, and thanks in part to this week’s rally of oil prices.