E-Paper
Brent oil extends advance toward $60 on tightening global supply
Oil extended gains toward $60 a barrel in early Asian trading as global supplies tighten and the demand outlook improves with the rollout of Covid-19 vaccines.
Oil extended gains toward $60 a barrel in early Asian trading as global supplies tighten and the demand outlook improves with the rollout of Covid-19 vaccines.
Futures in London climbed 0.8% after capping a third weekly gain. The number of vessels sailing toward China jumped to a six-month high on Friday, signaling robust demand from the world’s largest importer. Key prompt timespreads for the global benchmark Brent and US crude have recently firmed in a bullish backwardation structure, indicating shrinking stockpiles.
Top independent trader Vitol SA, meanwhile, joined with rival Gunvor Group Ltd. in expressing caution about the recent surge in prices, while a technical indicator is showing that oil is overbought and due for a correction.
Oil has rallied about 60% since the end of October amid coronavirus vaccine breakthroughs and after Saudi Arabia pledged to deepen output cuts. There are still concerns about near-term demand, with a new virus variant spreading in the US and other regions across the world grappling with lockdowns.
Brent’s prompt timespread was 27 cents in backwardation -- where near-dated prices are more expensive than later-dated ones -- compared with a 7-cent contango at the start of the year.
