Adedapo Adesanya
By Adedapo Adesanya
Brent crude continued to shoot towards the $60 per barrel mark on Friday, posting further gains following a recent bullish trend supported by economic revival hopes and supply curbs.
At the trading session, the international benchmark futures gained 65 cents or 1.1 per cent to trade at $59.49 per barrel, while the United States’ crude benchmark, the West Texas Intermediate (WTI) crude, moved up by 1.35 per cent or 76 cents to trade at $56.99 per barrel.
The major reason for the recent bullish performance is based on the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) agreeing to keep curbing their output amid optimism on COVID-19 vaccine breakthroughs.
The rollout of COVID-19 vaccines is fuelling hopes of lockdowns being eased, boosting fuel demand. However, there are valid expectations that oil consumption will not return to pre-pandemic levels until 2022.
The gain was further reiterated by a moderate rebound in US employment growth in January although job losses in the prior month were deeper than initially thought, underscoring an urgent need for additional relief money from the government.
President Joe Biden’s drive to enact a $1.9 trillion coronavirus aid bill gained momentum on Friday. The House and the Senate looked to pass a coronavirus relief bill within two weeks using a budgetary tool that would allow Democrats to get the $1.9 trillion plan to fly without any Republican votes.
According to reports, the Senate passed a budget resolution early Friday after a marathon of votes on dozens of amendments.
The US President noted that he would have preferred to work with Republicans but had they not insisted on a far smaller, $600 billion proposal.
Further boosting the market, a weekly supply report showed a drop in US crude inventories to their lowest since March, suggesting that output cuts by OPEC+ producers are having the desired effect.
It was reported that the Energy Information Administration (EIA) published a crude oil inventory draw of 1 million barrels for the last week of January.
On its part, the American Petroleum Institute (API) estimated crude oil inventories had fallen by 4.26 million barrels.
