New York: Oil surpassed $ 66 a barrel as traders assess the prospects for a further recovery from the epidemic and expectations of higher global demand as the OPEC + alliance pressures production curbs to drain stocks.
West Texas Intermediate in New York gained as much as 0.8% after pulling back on Friday to close in a tight weekly loss.
The weekly death toll in the United States, Covid-19, fell to its lowest level in four months and new infections decreased, boosting expectations of energy consumption in the world’s largest economy. However, pockets of concern persist in the Asia-Pacific region, including a new outbreak in Hong Kong.
Crude oil rose strongly in the first months of 2021, buoyed by the vaccine-assisted recovery from the pandemic and the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to control supplies.
This combination – combined with an increase in attacks on Saudi oil infrastructure by the Houthi rebels – helped London’s Brent crude oil surpass $ 71 a barrel last week.
Data from China later Monday will confirm explosive growth in activity in the first two months of 2021, although the numbers will skew by comparisons from a year ago when the country was the first in the world to go into lockdown.
Figures from Asia’s largest economy will include industrial output and retail sales.
- West Texas Intermediate for April delivery rose 0.6% to $ 66.03 a barrel on the New York Mercantile Exchange at 7:39 am in Singapore.
Earlier, West Texas Intermediate crude rose by up to $ 66.16.
- Brent crude for May rose 0.6% to $ 69.60 a barrel on the ICE Futures Exchange.
- The Bloomberg Spot Dollar Index rose for a second day.
- The OPEC + alliance is betting on its tighter policy for a longer period of supply restrictions that will support higher prices without sparking a recovery in US shale oil production. On Friday, data from Baker Hughes Co showed that the number of drilling rigs in the US has not changed much.
The gains in energy markets on Monday came despite a more stable tone in the dollar. The US currency advanced, in part as the 10-year Treasury yield exceeded 1.6% as the vaccines rolled out and the US financial package passed.
In addition, the spot time spread of WTI sparked a warning, settling at 3 cents in delay, a bearish pattern as near term prices are cheaper than other prices. A week ago, the first month’s contract was postponed.