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Oil hits 13-month highs as market re-balances

Published 2021-02-14, 07:24 p/m
© Reuters. FILE PHOTO: Oil and gas tankers are anchored off the Marseille harbour
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By Noah Browning

LONDON (Reuters) - Oil prices soared on Monday to their highest in about 13 months as vaccine rollouts promised to revive demand and producers kept supply reined in.

Brent crude was up 77 cents, or 1.2%, at $63.20 a barrel at 0955 GMT, after climbing to a session high of $63.76, the highest since Jan. 22, 2020.

U.S. West Texas Intermediate (WTI) crude futures gained $1.04, or 1.8 %, to $60.51 a barrel. It touched $60.95 - its highest since Jan. 8 last year, earlier in the session.

Oil prices gained around 5% last week.

Prices have rallied over recent weeks as supplies tighten, due largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the group OPEC+.

Russian Deputy Prime Minister Alexander Novak said the global oil market is on a recovery path and the oil price this year could average $45-$60 per barrel.

"We've seen low volatility in the past few months. This means the market is balanced and the prices we are seeing today are in line with the market situation," Novak was quoted as saying.

Meanwhile U.S. President Joe Biden pushed for the first major legislative achievement of his term on Friday, turning to a bipartisan group of local officials for help on his $1.9 trillion coronavirus relief plan.

"The long-awaited $1.9 trillion package has not been passed. As the latest U.S. job data hints at struggling labour market the relief package cannot come soon enough for some," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

"The stimulus will likely be approved in some shape or form", he added.

© Reuters. FILE PHOTO: Oil and gas tankers are anchored off the Marseille harbour

The Saudi-led coalition fighting in Yemen said late on Sunday it intercepted and destroyed an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom, state TV reported, raising fears of fresh Middle East tensions.

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