Oil hits more than one-year high on supply cuts, stimulus hopes
Oil prices rose on Monday to their highest in over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus.
Brent rose $1.12, or 1.9%, to $60.46 a barrel by 1:17 p.m. EST (1817 GMT), while U.S. West Texas Intermediate rose $1.04, or 1.8%, to $57.89 a barrel, after reaching a session high of $60.40. Both benchmarks were at the highest since January 2020.
“Managing to breach $60 again feels like the market is finally resurfacing after the long struggle and (taking) a proper breath,” said Rystad Energy’s vice president for oil markets Paola Rodriguez Masiu. “It offers a feeling of normality again.”
Brent and WTI have risen more than 60% since the start of November. Optimism around coronavirus vaccine distributions as well as production cuts from OPEC+ members has bolstered prices.
“There seems to be a paradigm shift in the market,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There is a sense that the glut of oil supply is disappearing more rapidly than anybody thought possible.”
Saudi Arabia pledged extra supply cuts in February and March following reductions by other members of the Organization of the Petroleum Exporting Countries and its allies.
In a sign that prompt supplies are tightening, the six-month Brent spread hit a high of $2.54 on Monday, its widest since January last year, a signal of demand for current supply.
(c) Reuters
News.Az
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