Oil prices hit two-year high on OPEC+ discipline, demand hopes; Brent tops $72/barrel

• Financial

On Friday, both US and UK crude oil futures’ prices had extended their latest leg of blistering rally into a fifth straight session in a row with UK crude surpassing $72 per barrel for the first time since 2019, as a disciplined OPEC+ supply outlook alongside prospects of a demand-surge had countered frets of an uneven vaccine rollout across the globe.

In point of fact, oil futures’ prices feathered further as 14-member OPEC (Organization of Petroleum Exporting Countries) alongside their Kremlin-backed allies had told on Tuesday that they would stick on to a supply restrain agreed a couple of months earlier, while an anticipated drop in US crude stockpile last week amid an increase in US gasoline uses, added to a bullish wind into oil market landscape.

Aside from that, a weakening of American currency following a slower-than-anticipated growth in US nonfarm payrolls last month, bode well for both US and UK crude oil contracts. In tandem, US oil drilling service provider Baker Hughes said that American energy firms had slashed the number of oil and natgas rigs last week, spurring up investors’ optimism further.

Crude oil drifts higher as Brent top $72 per barrel

Citing statistics, in the day’s commodity market round off, Brent crude gained 0.8 per cent to settle down at $71.89 after hitting a session high of $72.17 earlier in the day, remarking the highest level since May 2019, while US WTI (West Texas Intermediate) crude oil futures’ prices added 1.2 per cent to $69.62 per barrel after hitting an intraday high of $69.76, the strongest level since October 2018.

On the week, US WTI crude oil futures jumped 4.15 per cent, while UK crude contracts advanced 3.81 per cent. Meanwhile, referring to a bullish outlook for oil demand deeper into the year, an analyst at oil broker PVM, Stephen Brennock said, “After much dilly-dallying, Brent appears to have found a new home above $70.

Summer and the reopening of the global economy is bullish for oil demand in the second half of the year”.