Oil touches fresh 11-month highs, shrugging off unrest in Washington

NEW YORK: Oil prices rose on Thursday, shrugging off surprising political unrest in the United States, as markets remain focused on Saudi Arabia's pledge to cut oil output by more than expected.

Brent crude rose 28 cents to $54.58 a barrel by 11:35 a.m. EST (1635 GMT) after touching $54.90, a fresh high not seen since before the first COVID-19 lockdowns in the West.

U.S. West Texas Intermediate (WTI) was up 30 cents to $50.93, after hitting a high at $51.28.

On Wednesday, a mob of President Donald Trump's supporters stormed the U.S. Capitol after he urged them to protest Congress's validation of his election loss. Crude futures prices briefly dipped during the unrest.

Oil prices have been supported this week by a pledge by Saudi Arabia, the world's biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March.

"By next month, this bull market could re-establish into higher levels mainly with the benefit of Saudi Arabia's unexpected voluntary 1 mb production cut," Ritterbusch added.

UBS analysts raised their forecast for Brent to $60 per barrel by mid-year, citing the Saudi output decision.

"Saudi Arabia ...intimately knows the relationship between the oil price and the global inventory levels. Lower inventories equal higher prices," SEB chief commodity analyst Bjarne Schieldrop said.

Global equities were higher, as investors believe President-elect Joe Biden would be empowered to spend more freely following victories by two Democrats senators in Georgia that gave them control of both chambers of U.S. Congress.

"Expected stimulus measures under a Biden administration that will likely include significant infrastructure investment represents a supportive consideration capable of boosting gasoline and diesel demand," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.