Oil prices held near 11-month highs on Friday and were on track for a strong weekly gain as Saudi Arabia’s pledge to cut output continued to buoy market sentiment.
Brent Crude climbed 13 cents, or 0.2%, to $54.51 a barrel by 0531 GMT. It touched $54.90 on Thursday, the highest since February.
U.S. West Texas Intermediate (WTI) gained 14 cents, or 0.3%, to $50.97. The contract closed up 0.4% on Thursday after also hitting its highest since February at $51.28.
Both benchmarks are on track for gains of about 5% for this week.
“Saudi’s decision to make voluntary cuts to its output continued to provide support,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“Strong global equities, backed by excessive liquidity, also prompted fresh buying in oil,” he added, but warned that oil and stock markets may see a correction soon as their rallies do not reflect the current state of fuel demand and the global economy.
Earlier this week Saudi Arabia, the world’s biggest oil exporter, said it would cut output by an additional 1 million barrels per day (bpd) in February and March.
On Thursday, seven North Sea crude cargoes were bought and sold in the trading window operated by Platts, a record amount that trade sources said may reflect tighter supply after the surprise cut.
UBS raised its forecast for Brent to $60 per barrel by mid-year, following Saudi Arabia’s unilateral cut and expectations of a sharp recovery in demand in the second quarter as coronavirus vaccine rollouts revived travel.
The raging pandemic claimed its highest U.S. death toll yet, killing more than 4,000 people in a single day, while China reported the biggest rise in daily cases in more than five months and Japan may extend a state of emergency beyond the greater Tokyo region. [nT9N2IO00M]
U.S. fuel inventories rose last week, with gasoline stocks increasing by 4.5 million barrels, the biggest increase since April, the Energy Information Administration said on Wednesday.
On the technical front, Brent Crude RSI stood at 73.171 the current price is trading Above All the Moving Averages. So, a BUY trade can be executed with the following target and stop-loss:
TRADE SIGNAL- Brent Crude– BUY: 54.70, TARGET:55.70, STOP LOSS:54.20.