On Monday, oil prices increased to their highest level in a year, when Brent crude oil price exceeded $ 60 a barrel, aided by reduced supply among major producers and hopes for additional US economic stimulus which could boost demand.
Brent crude rose 68 cents, or 1.2 percent, to $ 60.02 a barrel while US West Texas Intermediate crude increased 68 cents, or 1.2 percent, to $ 57.53 per barrel.
International Oil Prices are at their highest since January 2020.
Norbert Roker, analyst with the Swiss bank, commented:
Oil prices have returned to levels close to pre-epidemic levels. Support seems strong and according to the stories, the oil market will quickly burn out during the remaining surplus of the crisis, and it is likely to tighten later this year.
The tight oil market continues as Saudi Arabia pledged to further cut supplies in February and March following cuts from other Organization of the Petroleum Exporting Countries and its allies.
In a sign of immediate supply cuts, the six-month difference in Brent crude prices hit its highest level of $ 2.50, the highest since January last year.
As per analysts Saudi Arabia has sent a “very positive signal” last week by keeping monthly crude oil prices for Asia unchanged despite expectations of a slight decline.
The dollar’s weakening against most currencies on Monday also supported commodities as dollar assets became more accessible to holders of other currencies.
Investors are also closely watching the $ 1.9 trillion U.S. Covid-19 stimulus package expected to be passed by lawmakers this month. Moreover, Hopes that Iranian oil exports will soon return to the market have diminished, supporting oil prices.
US President Joe Biden said the United States would not lift sanctions on Iran just to bring it back to the negotiating table, while Iran’s Supreme Leader Ayatollah Ali Khamenei said all sanctions must be lifted first. Meanwhile, high oil prices are prompting US producers to increase production.
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