Oil Stable Near Multi-Year Highs Supported By Demand Prospect

Illustration (Pixabay)

JAKARTA - Oil prices held near multi-year highs in US trade early Monday, supported by a better demand outlook as increased COVID-19 vaccinations in many countries helped lift travel restrictions. Brent crude rose 14 cents, or 0.2 percent, to trade at 72.83 dollars by 0123 GMT. Brent had risen 1.1 percent last week and hit its highest since May 2019 at $73.09 a barrel on Friday, June 11. U.S. West Texas Intermediate (WTI) crude was also up 14 cents, or 0.2 percent, to trade. at $71.05 a barrel, after hitting its highest level since October 2018 at $71.24 on Friday, June 11 and up 1.9 percent on the week. Vehicle traffic is returning to pre-pandemic levels in North America and parts of the country. Europe's largest and more planes take to the air as lockdowns and other restrictions are eased, prompting a third straight week of gains in benchmark oil prices. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, need to increase production to meet recovering demand, the Agency for Energy International (IEA) said in its monthly report on Friday, June 11.

The OPEC+ group has been holding back production to support prices after the pandemic wiped out demand in 2020. “OPEC+ needs to open the tap to keep the world oil market adequately supplied,” the IEA said. Goldman Sachs said last week they expected Brent to rise to $80 a barrel this season. this summer as vaccination rollouts boosted economic activity worldwide. The U.S. oil rig count rose six rigs to 365 rigs, the highest since April 2020, energy services firm Baker Hughes Co said in its weekly report. It was the largest weekly increase in oil rigs in a month, as drilling companies are trying to benefit from the increasing demand.