Oil holds near multi-year highs amid demand recovery

Oil prices held near multi-year highs on Monday, underpinned by an improved outlook for demand as increased COVID-19 vaccinations help lift travel curbs.

Brent crude was up 14 cents, or 0.2%, at $72.83 by 0123 GMT. It rose 1.1% last week and hit the highest since May 2019 of $73.09 on Friday.

U.S. West Texas Intermediate was also up 14 cents, or 0.2%, at $71.05 a barrel, after reaching the highest since October 2018 at $71.24 on Friday and rising 1.9% on the week.

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A worker at an oil field owned by Bashneft, Bashkortostan, Russia, in this January 28, 2015 file photo. REUTERS/Sergei Karpukhin/Files

Vehicle traffic is returning to pre-pandemic levels in North America and much of Europe and more planes are in the air as lockdowns and other restrictions are being eased, driving three weeks of gains for the oil benchmarks.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, need to increase output to meet recovering demand, the International Energy Agency (IEA) said in its monthly report on Friday.

The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020.

“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the IEA said.

Goldman Sachs said last week it expects Brent to rise to $80 per barrel this summer as the rollout of inoculations boosts economic activity around the world.

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U.S. oil rigs rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co said in its weekly report.

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It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.

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