Oil hit a 32-month high as the roll-out of coronavirus vaccines underpins an improved demand outlook in the U.S. and Europe.
West Texas Intermediate advanced 0.5% to the highest level since October 2018, building on a run of three weekly gains. Americans are becoming increasingly comfortable meeting friends, going back to workplaces, and attending large-scale events, according to a CBS News survey, as U.S. daily air travelers topped two million for the first time since the pandemic began.
The U.S. benchmark is on course for a fifth quarterly advance, which would be the best run since 2010, as consumption improves while the Organization of Petroleum Exporting Countries and its allies ease supply curbs only gradually. Global oil demand will recover to pre-pandemic levels late next year, the International Energy Agency predicted last week, urging OPEC and its partners to keep markets balanced by tapping their plentiful spare production capacity.
Crude has digested a lot of incremental, bullish news over the past week, with the U.S. and Europe reopening, according to Vandana Hari, founder of Vanda Insights. Prices could creep higher over the coming weeks but “at a more gradual pace,” with the market awaiting fresh momentum, Hari said.