Oil climbs closer to $60 on growth hopes and OPEC+ supply cuts

Crude prices hit their highest level in over a year on Friday, closing in on $60 a barrel amid economic revival hopes and supply curbs by OPEC and allied producers.

International benchmark Brent was up 1.1 percent, at $59.52 as of 14:25 GMT, after hitting its highest since February 20 last year at $59.75. US West Texas Intermediate crude also grew more than one percent to above $57 per barrel, its highest since January 22 last year.

“The conditions still remain supportive for oil markets,” Jeffrey Halley, analyst at brokerage OANDA, was quoted as saying by Reuters. “Oil should find plenty of willing buyers on any material dip.”

The last time Brent was trading at $60 was right before the pandemic, when economies were open and people were free to travel, meaning demand for gasoline, diesel and jet fuel was much higher.

Analysts say the rollout of Covid vaccines is fueling hopes of lockdown restrictions being eased, boosting fuel demand. Nevertheless, analysts do not expect oil consumption to return to pre-pandemic levels this year.

The Crude price was also backed by supply curbs from major oil producers as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, stuck to their supply-tightening policy at a meeting on Wednesday. 

“OPEC+ discipline has been a real positive,” said Michael McCarthy, chief market strategist at CMC Markets. Record OPEC+ cuts have helped to lift prices from historic lows last year.

A weekly supply report, which showed a drop in US crude inventories to their lowest since March, has further boosted the market.

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