LONDON (Reuters) – Oil prices rose on Monday, reaching their highest levels in more than two years, supported by the economic recovery and the prospect of growing demand for fuel as vaccination campaigns in countries developed are accelerating.
Brent rose 85 cents, or 1.2%, to $ 73.54 a barrel at 0908 GMT, its highest level since April 2019.
US West Texas Intermediate gained 72 cents, or 1%, to $ 71.63 a barrel, its highest level since October 2018.
“The two main markers for crude are trading at (almost) two-and-a-half-year highs amid a powerful bullish cocktail of demand optimism and supply cuts from OPEC +,” said Stephen Brennock of the oil broker PVM.
“This backdrop of strengthening oil fundamentals has helped support increased levels of business activity. “
Car traffic is returning to pre-pandemic levels in North America and much of Europe, and more planes are in the air as anti-coronavirus lockdowns and other restrictions are relaxed, resulting in a three-week increase for oil references.
The mood was also supported by the G7 summit where the world’s richest western countries sought to project an image of cooperation on key issues such as recovery from the COVID-19 pandemic and the donation of a billion doses of vaccine to poor countries.
The International Energy Agency (IEA) said on Friday it expected global demand to return to pre-pandemic levels at the end of 2022, faster than expected.
The IEA has urged the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, to increase production to meet growing demand.
The OPEC + group has restricted production to support prices after the pandemic wiped out demand in 2020, maintaining strong compliance with targets agreed in May.
Operating U.S. oil rigs rose six to 365, the highest since April 2020, energy services firm Baker Hughes Co said in its weekly report. [RIG/U]
It was the largest weekly increase in oil rigs in a month, as drilling companies sought to take advantage of rising demand.