TOKYO (Reuters) – Oil prices rose to a 13-month high on Monday as fears of rising tensions in the Middle East sparked a new buy, while hopes that a American stimulus and a easing of blockages would strengthen fuel demand.
Brent crude rose $ 1.09, or 1.8%, to $ 63.52 a barrel at 0428 GMT, after rising to a session high of $ 63.76, the highest since January 22, 2020.
United States West Texas (WTI) gross futures gained $ 1.28, or 2.2%, to $ 60.75 a barrel. It hit a high since January 8 last year, of $ 60.95 prior to the session.
Oil prices rose about 5% last week.
The Saudi-led coalition in Yemen said Sunday afternoon that it had intercepted and destroyed an explosive-laden drone launched by the Houthi group lined up in Iran for the kingdom, state television reported, raising fears to new tensions in the Middle East.
“The news triggered an early rebound in oil markets,” said Kazuhiko Saito, chief analyst at commodity broker Fujitomi Co.
“But the rally was also driven by growing hopes that a U.S. stimulus and a decrease in blockades would boost the economy and fuel demand,” he said. WTI may be withdrawn for profit-taking as it reached a key level of $ 60, he added.
U.S. President Joe Biden on Friday pushed for the first major legislative achievement of his term and turned to a bipartisan group of local officials for help on his $ 1.9 trillion coronavirus relief plan.
Oil prices have also risen in recent weeks as supplies fell, mainly due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the OPEC + group.
“On top of that, robust global stock markets increased investor risk appetite,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
Asian stocks advanced to record highs on Monday as the successful launch of coronavirus vaccines globally raises hopes of a quick economic recovery amid Washington’s new fiscal aid.
“With the economic money supply in the midst of worldwide monetary relief, the rapid introduction of the vaccine and the scarce supply of OPEC + and U.S. shale oil producers, crude could go up to $ 70 a barrel, ”Yoshida said.
Reports by Yuka Obayashi; Edited by Richard Pullin