By Gina Lee
Investing.com – Oil was up Tuesday morning in Asia, and were at their highest level since January 2020, boosted by major producers cutting supplies and increasing hopes for fuel demand recovery.
Brent oil futures gained 0.64% to $61.09 by 10:27 PM ET (3:27 AM GMT), passing the $60 mark. WTI futures rose 0.85% to $58.46. Both Brent and WTI futures saw front-month prices rise for a seventh session overnight, the longest streak since January 2019.
Saudi Arabia, the world’s biggest oil exporter, has implemented additional supply cuts in February and March on top of those implemented by members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+). These are reducing supplies and helping to balance the global markets.
Also boosting investor hopes are the continuous global rollout of COVID-19 vaccines and data suggesting that the virus has peaked in countries such as the U.S. The dollar was also down on Wednesday.
“Progress on U.S. stimulus and optimism around the roll-out and effect of vaccines across the remainder of 2021 and a slightly weaker USD help the view (for a recovery) albeit there was mixed news on the impact of the current vaccines formulated on the emerging South African COVID-19 variant,” Axi chief global markets strategist Stephen Innes told Reuters.
He warned, however, that both Brent and WTI futures are in overbought territory on technical charts.
“While I remain a bit cautious at current levels, the medium and longer-term outlook for demand is healthy, and one can understand a willingness to look through some of the near-term uncertainty that remains for oil,” he added.
Investors also await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.