Singapore (Reuters) – Friday’s oil prices climbed to their highest levels in a year, extending a series of strong gains on economic growth signals in the United States and continued commitment from producers to hold back crude supply.
“Increasing confidence in a surge in economic recovery and oil demand around the corner is a key driver for crude,” said Vandana Hari, energy analyst at Vanda Insights.
“Right now, the tight tightening of supply as a result of the additional Saudi cuts is adding to the tails,” Hari said. “Brent may be well on his way to the $ 60 milestone.”
Brent crude futures climbed 40 cents, or 0.7%, to $ 59.24 a barrel before 0428 GMT, after hitting a high of $ 59.41, the highest level since February 20 last year. Brent is on track to rise 6% this week.
U.S. West Texas Intermediate (WTI) crude futures jumped 42 cents, or 0.8%, to $ 56.65 a barrel, after touching a high of $ 56.84, which peaked since Jan. 22 last year. The benchmark contract is on track for a weekly gain of nearly 9%, which would be the biggest weekly gain since October.
In a sign of tightening crude oil supply, the six-month backlash jumped in Brent and WTI futures – when the price for fast delivery is higher than the price for futures delivery – to 13-month highs for all contracts at $ 2.41 and $ 2.30 a barrel, respectively.
Markets were stimulated by stronger-than-expected orders for U.S. goods in December, signaling strength in manufacturing, and he hopes to quickly get approval from lawyers for a $ 1.9 trillion coronavirus relief plan that has been announced. proposed by President Joe Biden.
“OPEC + control has been very optimistic,” said Michael McCarthy, chief market strategist at CMC Markets, referring to the Organization of Petroleum Exporting Countries and its Russian-led allies. The alliance reaffirmed this week its support for deep supply cuts that have helped bring down global crude stocks.
“And then when we have signs of better economic growth, it’s then and there (for prices),” McCarthy said.
Chinese demand for crude oil is also helping to support the market, as evidenced by an industry study that reports that two tanks of North Sea crude oil are heading to China for 22 March and March 24, said Stephen Innes, Axi global market strategist.
“When demand drives commodity prices, it has a more bullish effect and leaves a more lasting reflection on price action,” Innes said in a note.
Reporting with Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; Edited by Kenneth Maxwell and Richard Pullin