NEW YORK (Reuters) – Oil prices hit an all-time high on Friday, closing in at $ 60 per barrel, backed by hopes of economic recovery and supply loops by production group OPEC and its friends.
Oil was also supported as U.S. stock markets hit higher levels of progress towards more economic stimulus, while a closely watched jobs report confirmed that the labor market stabilization.
U.S. employment growth rebounded moderately in January and the previous month’s job losses were deeper than initially expected, reinforcing an urgent need for additional relief money from the government. President Joe Biden’s attempt to implement a $ 1.9 trillion coronavirus aid bill won Friday.
Brent crude rose 72 cents, or 1.2%, at $ 59.56 before 10:52 am ET (1552 GMT) after hitting a record high of Feb. 20 at $ 59.79. U.S. crude rose 76 cents, or 1.4%, at $ 56.99, after reaching $ 57.29, the highest level since Jan. 22 last year.
“Brent is now monitoring the $ 60 level that OPEC + has reduced most supply side concerns and there is hope for the development of a global COVID front,” said Edward Moya. senior market analyst at OANDA in New York.
“The foundations are still hard for raw, but there seems to be consolidation as a result of the recent run.”
Brent is set to rise more than 6% this week. The last time he traded at $ 60 a barrel, the pandemic had not yet caught up, economies were open and people were free to travel, meaning demand for gasoline, diesel and jet fuel was much higher. height.
But with the introduction of the COVID-19 vaccines, it is hoped that lock-in will be reduced, boosting fuel demand. But even optimists like OPEC do not expect oil consumption to return to pre-pandemic levels by 2022.
“What is really helping the market today, and is a more legitimate reason for the price increase we are seeing, is again coming from Saudi Arabia and its flagship company. , Aramco, ”said Rystad Energy ‘s head of oil markets, Bjornar Tonhaugen.
Aramco raised its official Arab Light (OSP) retail price to northwestern Europe by $ 1.40 a barrel from the previous month. The move could be a sign that Saudi Arabia is more optimistic in the outlook for oil demand, which fuels bullish sentiment in the market, Tonhaugen said.
Oil was also supported by supply loops from producers. OPEC and its allies, collectively known as OPEC +, adhered to their supply tension policy at Wednesday’s meeting. Higher OPEC + cuts have helped lift prices from last year’s historic levels.
“OPEC + control has been very optimistic,” said Michael McCarthy, chief market strategy at CMC Markets.
Giving the market more impetus, a weekly supply report showed a fall in U.S. crude investments to its lowest level since March, suggesting that yield cuts by OPEC + producers are having the desired effect. [EIA/S]
However, the oil rig number, an early indicator of future production, has gone up for just five months. The latest weekly data from Baker Hughes is available at 1pm.[RIG/U]
Additional commentary by Alex Lawler in London, Sonali Paul in Melbourne, Roslan Khasawneh and Koustav Samanta in Singapore; Edited by Marguerita Choy and Emelia Sithole-Matarise