AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,941 Increased By 63.6 (0.92%)
BR30 22,802 Increased By 233 (1.03%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Markets

Oil set for weekly gain on Saudi output cut pledge

  • Brent, WTI set for weekly gains of more than 6%.
  • Rally in global equities also feeds appetite for risk.
  • Latest global lockdowns delay fuel demand recovery.
Published January 8, 2021

LONDON: Oil prices hit 11-month highs and were on track for a weekly gain on Friday, supported by Saudi Arabia's pledge to cut output and a global stocks rally as investors looked beyond rising coronavirus cases.

Brent crude climbed 83 cents, or 1.5%, to $55.21 a barrel by 1202 GMT, the highest since late February, and US West Texas Intermediate (WTI) gained 66 cents, or 1.3%, to $51.49, also its highest level since late February.

Both were on track for weekly gains of more than 6%.

"The surprise Saudi cut is keeping bulls at the helm," said Stephen Brennock of oil broker PVM. "It will take a brave man to bet against the current bullish run of play."

Saudi Arabia this week pledged extra, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns.

However, analysts said oil prices could see a correction in coming months, if their rallies were not backed by stronger fuel demand.

Severe mobility restrictions around the world to contain a surge in COVID-19 cases still weighed on fuel sales, weakening the prospect of energy demand recovery in the first half of 2021.

"Oil markets are expected to stay in a bullish tone toward February," said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

"But concerns over slower demand in gasoline and other fuels in the United States and other parts of the world due to wider restrictions to contain the spreading COVID-19 pandemic may limit gains."

The pandemic claimed its highest US death toll yet, killing more than 4,000 people in a single day, while China reported the biggest rise in daily cases in more than five months and Japan may extend a state of emergency beyond the greater Tokyo region.

A rally in global shares also lent some support to oil prices, with Japan's Nikkei hitting a three-decade peak, as investors looked beyond rising coronavirus cases and focused on hopes for an economic recovery later in the year.

As a sign of tighter supply following Saudi Arabia's cut, seven North Sea crude cargoes were bought and sold in the trading window operated by Platts on Thursday. Normally, just one or two cargoes change hands each day.

Comments

Comments are closed.