Commodities

Oil hits multi-year highs amid demand recovery

Reuters TOKYO | Updated on June 14, 2021

Brent crude rose 14 cents, or 0.2 per cent, to $72.83 by 0123 GMT

Oil prices held near multi-year highs on Monday, underpinned by an improved outlook for demand as increased Covid-19 vaccinations help lift travel curbs.

Brent crude was up 14 cents, or 0.2 per cent, at $72.83 by 0123 GMT. It rose 1.1 per cent last week and hit the highest since May 2019 of $73.09 on Friday.

US West Texas Intermediate was also up 14 cents, or 0.2 per cent, at $71.05 a barrel, after reaching the highest since October 2018 at $71.24 on Friday and rising 1.9 per cent on the week.

Vehicle traffic is returning to pre-pandemic levels in North America and much of Europe and more planes are in the air as lockdowns and other restrictions are being eased, driving three weeks of gains for the oil benchmarks.

The Organisation of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, need to increase output to meet recovering demand, the International Energy Agency (IEA) said in its monthly report on Friday.

The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020.

"OPEC+ needs to open the taps to keep the world oil markets adequately supplied," the IEA said.

Goldman Sachs said last week it expects Brent to rise to $80 per barrel this summer as the roll-out of inoculations boosts economic activity around the world.

US oil rigs rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co said in its weekly report.

It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.

Published on June 14, 2021

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