Futures Movers: Brent crude closes in on $60 a barrel as oil heads for big weekly gains

United States

Brent crude oil prices pushed toward $ 60-a-barrel Friday, on track for big weekly gains, boosted in part by ongoing signs of strong demand and production restraint by OPEC countries.

“Besides ‘soft’ factors such as increased demand from investors in view of the pronounced price buoyancy, rising stock markets and economic optimism, the physical market is also looking increasingly tight,” said Eugen Weinberg, commodity analyst at Commerzbank, in a note.

West Texas Intermediate crude for March delivery CL.1, +0.85% CLH21, +0.85% rose 55 cents, or 1%, to $ 56.77 a barrel on the New York Mercantile Exchange, leaving the U.S. benchmark on track for an 8.8% weekly gain. April Brent crude BRN00, +0.93% BRNJ21, +0.93%, the global benchmark, advanced 65 cents, or 1.1%, to $ 59.49 a barrel on ICE Futures Europe, up 8% for the week.

In an indication of robust demand, Weinberg noted that despite higher prices, Saudi Arabia won’t be granting discounts to Asian customers in March, and will leave price premiums in place despite expectations for a cut.

The analyst, however, argued that optimism over demand, which is shared by major oil producers, who look for demand to return to record 2019 levels as early next year, is overdone.

“ We see such forecasts as ambitious and expect prices to correct in the coming months,” Weinberg wrote.

Oil futures had extended their streak of gains on Thursday, with U.S. prices up for a fourth consecutive session to mark their highest settlement in more than a year.

Oil prices remained underpinned by expectations that the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, will continue keeping a lid on output, as the global economy makes headway toward a recovery from the COVID-19 pandemic.

OPEC+ made no changes to output curbs at a monthly ministerial committee meeting Wednesday, and in a statement said its “optimistic for a year of recovery” in 2021.