Oil extends rally after rising to pre-Covid high on tight market
Oil extended a rally from the highest level in more than a year on signs the global market is tightening and demand is improving.
Futures in New York climbed above $58 a barrel after surging 11% over the past six sessions as oil continued a robust recovery from the Covid-19 pandemic that eviscerated fuel demand. Trafigura Group sees prices moving even higher as refiners increase processing rates to meet rising product demand, while crude stockpiles in the U.S. are forecast to have dropped further last week.
Oil’s surge since the end of October has been underpinned by Covid-19 vaccine breakthroughs and a more recent pledge by Saudi Arabia to deepen production cuts. Prompt timespreads are firming in a bullish structure indicating shrinking supplies, and coronavirus infections are starting to slow across the globe.
