Brent back below $70 after attack on Saudi oil facility as inflation worries mount

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Oil prices were steady on Monday after pushing above $70 a barrel for the first time since the start of the coronavirus crisis, with support from US stimulus and an attack on Saudi Arabian oil facilities countered by global inflation fears.

Brent, which initially surged to $71.38 a barrel, its highest since January 8, 2020, slipped by 73 cents, or 1 percent, on the day to $68.63 by 1500 GMT. The benchmark is still hovering around its highest level in more than a year.

US West Texas Intermediate (WTI) crude was down 63 cents, or 0.9 percent, at $65.46 after touching its highest since October 2018 at $67.98.

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The US Senate passed on Saturday President Joe Biden’s $1.9 trillion COVID-19 relief plan, lifting prospects for the economy and fuel demand that has been pummeled by the pandemic.

“The spectacular oil price ascent deserves some cautious thinking ... Our balances indicate that the market is already tight enough to achieve a balanced recovery,” said Rystad Energy oil markets analyst Louise Dickson.

“Looking ahead, higher crude prices at this stage of COVID-19 economic recovery could be premature,” she said.

Global equities dipped on Monday as the US stimulus package and a tech stock rally raised inflation jitters, partly fueled by the rising oil price.

Crude prices have been buoyant since the Organization of the Petroleum Exporting Countries, Russia and their oil producing allies, known as OPEC+, agreed last week on broadly sticking with output cuts despite rising crude prices.

“There is little data to drive oil over the rest of the session, so sentiment is likely to remain a key force,” said Sophie Griffiths is a market analyst with OANDA.

Read more:

Oil prices up 2 pct, almost 14-month high, after OPEC+ extends output cuts

Oil prices rise after Saudi minister urges caution on market at OPEC+ meet

Saudi Arabia in no hurry to end its voluntary oil production cut: Prince Abdulaziz

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