(Bloomberg)Oil rose toward $60 a barrel in London as supplies continue to tighten while the demand outlook improves with the roll-out of coronavirus vaccines.Brent climbed for a sixth day as it closed in on a level last reached in February 2020, before Covid-19 upended global energy markets. Crude stockpiles tied to oil futures in China fell to the lowest since June 2020, according to data analytics company OilX, the latest sign of ebbing inventories in the world’s largest importer.The recent rally is being backed by a surge of interest in commodities. The Organization of Petroleum Exporting Countries and its allies have pledged to keep draining a virus-driven surplus and there are expectations the global economy will recover this year, raising forecasts for stronger oil demand. Investor holdings of West Texas Intermediate futures have soared to the highest since 2018.
“Besides soft factors such as increased demand from investors in view of the pronounced price buoyancy, rising stock markets and economic optimism, the physical market is also looking increasingly tight,” said Eugen Weinberg, head of commodities research at Commerzbank AG.
Prices
Brent for April settlement climbed 1% to $59.44 a barrel as of 8:48 a.m. New York time
Prices are heading for a third straight weekly gain
WTI for March delivery rose 1.1% to $56.83
However, there are also reasons to be cautious. Oil at $60 a barrel will bring back more supply and keep any further gains in check, according to top trading firm Gunvor Group Ltd. Average WTI prices for the rest of the year are around $55 a barrel, while for next year they’re above $50, levels that could spur producers to pump more.
For now though, there are signs of ongoing strength as Saudi Aramco left its oil prices unchanged for Asia in March, defying expectations of a cut. It also hiked pricing to Europe and the U.S.
Other oil-market news
Chevron Corp. offered to buy pipeline operator Noble Midstream Partners LP, a deal that would streamline what is already a tightly integrated relationship following last year’s acquisition of Noble Energy Inc.
Cnooc Ltd. is planning a massive boost in spending and production as China’s oil majors try to keep up with energy demand that’s roaring back from the pandemic.
Argentina’s gasoline demand was the worst in a decade last year.
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