Oil rose towards $72 a barrel on Friday, trading close to a two-year high as OPEC+ supply discipline and recovering demand countered concerns about patchy COVID-19 vaccination rollout around the globe.
The Organization of the Petroleum Exporting Countries (OPEC) and allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed U.S. crude inventories dropped more than expected last week.
Brent crude rose 33 cents, or 0.5%, to $71.64 a barrel by 0812 GMT. It reached an intra-day high of $71.99 on Thursday for its highest since May 2019. U.S. West Texas Intermediate crude was up 22 cents, or 0.3%, at $69.03.
“After much dilly-dallying, Brent appears to have found a new home above $70,” said Stephen Brennock of oil broker PVM.
“Summer and the reopening of the global economy is bullish for oil demand in the second half of the year.”
For the week, Brent is on track for a gain of more than 2.8% and U.S. crude is heading for a 4% rise.
Also boosting oil this week was a slowdown in talks between the United States and Iran over Tehran’s nuclear programme, which reduced expectations for a rapid increase in supply of Iranian oil to the market.
In focus later on Friday will be U.S. jobs figures for May. The consensus forecast for non-farm payrolls, due at 1230 GMT, is that about 650,000 jobs were added in May.
While rising demand and the fast pace of COVID-19 vaccinations in countries such as the United States has boosted oil, a slower inoculation rollout and high infections in the likes of Brazil and India are hitting demand in high-growth oil markets.
India, the world’s second most populous country, has vaccinated only 4.7% of the adult population and is reeling from a second wave of infections.
