By Laila Kearney
NEW YORK (Reuters) – Oil prices hit new multi-year highs on Friday, closing a third straight week of gains on an improving outlook for global demand as rising COVID-19 vaccination rates help curb the pandemic.
Brent crude futures were at $ 72.69 a barrel, up 17 cents after hitting their highest level since May 2019. For the week, Brent was up 1%.
US West Texas Intermediate (WTI) crude futures were at $ 70.91 per barrel, up 62 cents, reaching their highest level since October 2018. WTI rose 1.0. 9% on the week.
âDemand is coming back faster than supply and we will need more supply to meet that demand,â said Phil Flynn, senior analyst at Price Futures Group in Chicago.
The International Energy Agency (IEA) said in its monthly report that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, should increase production to meet demand that is expected to return. to pre-pandemic levels by the end of 2022.
“OPEC + must turn on the taps to ensure an adequate supply of global oil markets,” said the Paris-based energy watchdog.
He said growing demand and countries’ short-term policies were at odds with the IEA’s call to end new funding for oil, gas and coal.
“In 2022, the 24-member OPEC + group, led by Saudi Arabia and Russia, has the potential to increase crude supply by 1.4 million barrels per day (bpd) above of its target from July 2021 to March 2022, “the IEA said.
U.S. investment bank Goldman Sachs has said it expects Brent crude prices to hit $ 80 a barrel this summer as the vaccine rollout spurs global economic activity.
âThe deployment of the vaccine in North America as well as in Europe is helping to restore demand as OPEC + ruled production,â said Andy Lipow of Lipow Oil Associates in Houston.
Data showing road traffic returned to pre-COVID-19 levels in North America and most of Europe was encouraging, analysts from ANZ Research said in a note.
âEven the jet fuel market is showing signs of improvement, with flights in Europe increasing 17% in the past two weeks, according to Eurocontrol,â ANZ analysts said.
In an indication of future supply, U.S. oil rigs rose six to 365 this week to reach their highest level since April 2020, energy services firm Baker Hughes Co said in its weekly report. [RIG/U] This is the largest weekly increase in oil rigs in a month.
(Additional reporting by Dmitry Zhdanikov, Shu Zhang and Sonali Paul; Editing by Marguerita Choy and Steve Orlofsky)