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Oil hits multi-year highs in third weekly gain on demand recovery

CommoditiesJun 11, 2021 03:25PM ET
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© Reuters. FILE PHOTO: Oil storage containers are seen, amid the coronavirus disease (COVID-19) pandemic, in Los Angeles, California, U.S., April 7, 2021. REUTERS/Lucy Nicholson

By Laila Kearney

NEW YORK (Reuters) -Oil prices reached fresh multi-year highs on Friday, closing out a third straight week of gains on an improved outlook for worldwide demand as rising COVID-19 vaccination rates help lift pandemic curbs.

Brent crude futures settled at $72.69 a barrel, rising 17 cents after reaching their highest since May 2019. For the week, Brent was up 1%.

U.S. West Texas Intermediate (WTI) crude futures settled at $70.91 a barrel, up 62 cents, settling at their highest since October 2018. WTI was up 1.9% on the week.

"Demand is coming back faster than supply and we're going to need more supply to meet that demand," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

The International Energy Agency (IEA) said in its monthly report that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

"OPEC+ needs to open the taps to keep the world oil markets adequately supplied," the Paris-based energy watchdog said.

It said that rising demand and countries' short-term policies were at odds with the IEA's call to end new oil, gas and coal funding.

"In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target," the IEA said.

U.S. investment bank Goldman Sachs (NYSE:GS) said it expects Brent crude prices to reach $80 per barrel this summer as vaccine rollouts boost global economic activity.

"The rollout of the vaccine in North America as well as Europe is helping to restore demand at the same time that OPEC+ has reigned in production," helping propel oil prices, said Andy Lipow of Lipow Oil Associates in Houston.

Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.

"Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol," ANZ analysts said.

In an indication of future supply, U.S. oil rigs rose by six to 365 this week to their highest since April 2020, energy services firm Baker Hughes Co said in its weekly report. [RIG/U] It was the biggest weekly increase of oil rigs in a month.

Oil hits multi-year highs in third weekly gain on demand recovery
 

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Comments (4)
Ernest Wong CA
Ernest Wong CA Jun 11, 2021 6:20PM ET
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sure if u guys agree with GS's "prediction" that Brent will hit $80 then why don't u guys all in now? LMAO
Vlad Lozovskiy
Vlad Lozovskiy Jun 11, 2021 3:16PM ET
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It is not a demand.  It is devaluing of a dollar.
Gene Kret
Gene Kret Jun 11, 2021 5:31AM ET
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Here comes $85 - $90 oil. The airlines have all doubled their quarterly reserves which means a super gigantic demand..... Sleepy Joe will push for incresed Iranian oil imports too !!! How do you like that ?? This means that the US will directly fund the Worlds Leading Terror State.... how do you like that??? 🇮🇱
Tony Teo
Tony Teo Jun 11, 2021 5:31AM ET
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Caution Too many hopefulls all looking for highrt prices ,, Same as in Sept 2018 !
Tony Teo
Tony Teo Jun 11, 2021 5:31AM ET
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My takey is Brent & WTI are both establishing their intetmediate TopS 99percent crtysinty ,,,
Tony Teo
Tony Teo Jun 11, 2021 5:31AM ET
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Typo .... Certainty
Mir Rehman talpur
Mir Rehman talpur Jun 10, 2021 10:30PM ET
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what is the price of this
 
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