UPDATE 7-Oil hits more than 1-yr high on supply cuts, stimulus hopes

* Brent, WTI reach highest since January 2020
* Six-month Brent backwardation spread widest in over a year
* U.S. oil rig count highest since May last week - Baker
Hughes

(Updates prices, market activity; changes byline, dateline,
previous LONDON)
By Stephanie Kelly
NEW YORK, Feb 8 (Reuters) - Oil prices rose on Monday to
their highest in just 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 measures that can boost demand.
Brent LCOc1 rose 96 cents, or 1.6%, to $60.30 a barrel by
11:37 a.m. EST (1637 GMT), while U.S. West Texas Intermediate
CLc1 gained $1.00, or 1.8%, to $57.85 a barrel.
"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 reached a session high of $60.40, and WTI hit a $57.97
peak, both their highest since January 2020.
"Oil prices are back close to pre-pandemic levels," said
Norbert Rucker, analyst at Swiss bank Julius Baer.
"Support seems robust and the narrative sees the oil market
swiftly burning through the remaining crisis-surplus,
potentially running into tightness later this year," he added.
The oil market continues to tighten, with Saudi Arabia
pledging 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 LCOc1-LCOc7 hit a high of $2.54 on Monday, its
widest since January last year.
OCBC economist Howie Lee said the world's top exporter Saudi
Arabia sent a "very bullish signal" last week when it kept
monthly crude prices to Asia unchanged despite expectations for
small cuts. CRU/OSP
"I don't think anybody dares to short the market when Saudi
is like this," he added.
Investors are also keeping a close watch on a $1.9 trillion
COVID-19 aid package for the United States that is expected to
be passed by lawmakers as soon as this month. Hopes that Iranian oil exports would soon return to the
market have been dampened, supporting oil prices.
U.S. President Joe Biden said the United States would not
lift sanctions on Iran simply to get it back to the negotiating
table, while Iran's Supreme Leader Ayatollah Ali Khamenei said
all sanctions should be lifted first. Stronger crude prices are meanwhile encouraging U.S.
producers to increase output.
The U.S. oil rig count, an early indicator of future output,
rose last week to its highest since May, according to energy
services firm Baker Hughes Co. RIG/U

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World Oil Demand and Supply https://tmsnrt.rs/39DrK8O
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>