Brent oil extends advance toward $60 on tightening global market

SourceGulf Business
SectorOil & Gas

Oil advanced near $60 a barrel as global supplies tighten and the demand outlook improves with the rollout of Covid-19 vaccines. Futures in London rose 0.9 per cent after capping a third weekly gain. A year after the pandemic kept millions home, grounding planes and devastating fuel demand, a rebound in consumption along with output curbs is leading to a rapid tightening of markets. Timespreads for the global benchmark Brent and US crude have recently firmed in a backwardation structure, indicating bullishness. While the number of vessels sailing toward China jumped to a six-month high on Friday, signaling robust demand from the world’s biggest importer, top independent traders Vitol and Gunvor Group Ltd. have expressed caution about the recent surge in prices.

At least one technical indicator is also showing that oil is overbought and due for a correction. Oil has rallied since the end of October amid Covid-19 vaccine breakthroughs and after Saudi Arabia pledged to deepen output cuts. OPEC+ more...