As
prices rose in line with broader financial markets, Brent crude
futures reached $53.33 a barrel, the highest since March 2020.
U.S. West Texas Intermediate (WTI) crude touched $49.83 a
barrel, the highest since February 2020.
By 1120 GMT, March Brent crude futures were at $52.52 a barrel,
up 72 cents, or 1.4%, and February WTI crude futures rose 42
cents, or 0.9%, to $48.94 a barrel.
"Price action today suggests that the market is assuming that
OPEC+ keeps the level of cuts unchanged for the upcoming month,"
said ING commodities strategist Warren Patterson.
OPEC and allies, a group known as OPEC+, will meet on Monday.
Most OPEC+ officials voiced opposition to increasing oil output
from February when they met on Sunday, three OPEC+ sources told
Reuters on Monday.
In December, OPEC+ decided to increase production by 0.5 million
barrels per day (bpd) from January as part of a 2 million bpd
gradual rise this year, but some members have questioned the
need to release more oil because of an upsurge in the COVID-19
pandemic.
"The start of the new year is presenting challenges to the OPEC+
group, as the balance of risks to oil demand recovery has
changed," BNP Paribas analyst Harry Tchilinguirian said.
Kuwait's oil minister said that he expected a gradual recovery
in oil demand, particularly in the second half of 2021, as many
countries start to distribute coronavirus vaccines.
Britain began vaccinating its population with the COVID-19 shot
developed by Oxford University and AstraZeneca on Monday.
Tensions in the Middle East also supported oil prices after an
"interaction" between Iranian authorities and a merchant vessel
in the Strait of Hormuz led the ship to alter its course and
proceed into Iranian waters.
Saudi-owned Al Arabiya TV said a South Korean-flagged tanker
carrying chemicals had been seized by Iran.
Oil also drew strength from a weaker dollar and strong
manufacturing activities in Asia.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Florence Tan in Singapore; Editing by Bernadette
Baum and Barbara Lewis)
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