WTI crude oil has started the new week on a strong footing, with prices soaring to the highest level seen in over a year, on the back of new geopolitical tensions in the Middle East, even as the possibility of more stimulus and economic recovery following easing of lockdowns support the bullishness. At the time of writing, WTI crude oil is trading at around $60.72 per barrel.

Over the weekend, a Saudi-led coalition fighting in Yemen announced that it had intercepted and destroyed a weaponized drone that was targeting the kingdom. According to them, it was launched by Houthi rebels – a group purportedly backed by Iran. The news raised fresh fears of geopolitical tensions building up in the Middle East region – the largest oil producing part of the world, and heightened the possibility of it affecting oil supply causing prices to strengthen.

A rally in crude oil prices has also found strength on rising hopes for the US to unveil more fiscal stimulus measures to boost its economic recovery in the wake of the coronavirus pandemic. On Friday, President Biden appealed to a bipartisan group of local officials for their support in passing his proposed $1.9 trillion stimulus package, which could potentially spur oil demand.

In addition, tighter supply by the leading oil producing nations of the world – OPEC and its allies, have also supported oil prices lately. Since the beginning of this month, Saudi Arabia has implemented an additional supply cut of 1 million bpd to help balance oil markets.