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Oil

Economic revival hopes, OPEC+ cuts boost oil prices above $59, highest in a year

Published: Updated:

Oil hit its highest level in a year above $59 a barrel on Friday supported by hopes of a quicker economic revival and supply curbs by OPEC and its
allies.

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New orders for US-made goods rose more than expected in December, pointing to continued strength in manufacturing. The US Congress is also moving ahead on President Joe Biden’s COVID-19 relief plan.

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Brent crude was up 69 cents, or 1.2 percent, to $59.53 by 0910 GMT, after hitting $59.67, its highest since February 20, 2020. US crude was up 66 cents, or 1.2 percent, to $56.89, after reaching $56.95, its highest since January 22, 2020.

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

Brent is on track to rise more than 6 percent this week.

The rollout of COVID-19 vaccines is fueling hopes of lockdowns being eased and people moving around more, boosting fuel demand.

Oil also gained support from supply curbs by major producers. OPEC and its allies stuck to their supply-tightening policy at a meeting on Wednesday. Record OPEC+ cuts have helped lift prices from historic lows last year.

“OPEC+ discipline has been a real positive,” said Michael McCarthy, chief market strategist at CMC Markets.

Further boosting the market, a weekly supply report showed a drop in US crude inventories to their lowest level since March, suggesting output cuts by OPEC+ producers to avert a stock build-up are working.