Oil prices hit multi-month highs as OPEC + is expected to maintain output By Reuters

By Florence Tan

SINGAPORE (Reuters) – Oil prices hit multi-month highs on Monday on expectations that OPEC and allied producers may limit production to current levels in February as the coronavirus pandemic keeps concerns elevated about the demand for the first semester.

Prices rose in line with broader financial markets and futures reached $ 53.17 a barrel, the highest since March 2020. US West Texas Intermediate crude touched $ 49.71 on barrel, the highest since February 2020.

March Brent crude futures were at $ 52.97 a barrel, up $ 1.17 or 2.3%, at 0617 GMT, while February WTI crude futures were up $ 1, or a 2.1%, at $ 49.52 a barrel.

Broader macroeconomic trends, including a weaker dollar and investor stance for a recovery in the oil sector this year, could support oil prices, Energy Aspects analyst Virendra Chauhan said.

“Perhaps there is positive sentiment from OPEC + seeking to restrict supplies in light of the virus rearing its ugly head in the west,” he added.

Mohammad Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), said on Sunday that while oil demand is expected to increase by 5.9 million barrels per day (bpd) to 95.9 million bpd This year, the group sees many downsides. demand risks in the first half of 2021.

“We are just beginning to emerge from a year of deep investment cuts, huge job losses and the worst destruction of demand on record,” he said.

Prices ended 2020 around 20% below the 2019 average, still reeling from the impact of global lockdown measures, which have dramatically reduced demand for fuel, despite the world’s leading producers agreeing to record production cuts .

OPEC and allied producers, including Russia, a grouping known as OPEC +, decided last month to increase production by 500,000 barrels a day in January, anticipating a boost in demand, and agreed to meet every month to review production.

Analysts at Energy Aspects and RBC Capital said OPEC + is likely to maintain January production levels in February.

“We believe that the producer group will choose to forego any further production increases for February as COVID-19 cases continue to increase and the launch of the vaccine is slower than expected,” said Helima Croft of RBC Capital .

In the United States, crude oil production remained under pressure from weak prices and tepid demand, more than 2 million barrels per day (bpd) in October since early 2020, a government report showed on 1 January.