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Oil climbs to 13-mth highs, as supply cuts, demand optimism support

Published 02/09/2021, 09:50 AM
Updated 02/09/2021, 10:00 AM
© Reuters.
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* Brent, WTI futures highest since January 2020
* Prices up a 7th session, longest streak since Jan 2019

By Florence Tan
SINGAPORE, Feb 9 (Reuters) - Oil prices edged up on Tuesday
to their highest in 13 months as supply cuts by major producers
and optimism over fuel demand recovery support energy markets.
Brent crude futures LCOc1 for April gained 29 cents, or
0.5%, to $60.85 a barrel by 0246 GMT. U.S. West Texas
Intermediate crude (WTI) CLc1 for March was at $58.25 a
barrel, up 28 cents, or 0.5%.
Both Brent and WTI are at their highest since January 2020.
Front-month prices for both contracts are up for the seventh
session on Tuesday, the longest win streak since January 2019.
Additional supply reductions by top exporter Saudi Arabia in
February and March, on top of cuts by producers in the
Organization of the Petroleum Exporting Countries and their
allies, are tightening supplies and balancing global markets.
Investors are also pinning hopes on oil demand recovery when
COVID-19 vaccines take effect. A weak dollar has also helped
shored up prices of commodities.
"Progress on U.S. stimulus and optimism around the roll-out
and effect of vaccines across the remainder of 2021 and a
slightly weaker USD help the view (for a recovery) albeit there
was mixed news on the impact of the current vaccines formulated
on the emerging South African variant," Stephen Innes, chief
global markets strategist at brokerage Axi.
He cautioned, however, that both Brent and WTI are in
overbought territory on technical charts.
"While I remain a bit cautious at current levels, the medium
and longer-term outlook for demand is healthy, and one can
understand a willingness to look through some of the near-term
uncertainty that remains for oil," he said.

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