Brent oil prices Monday shot past US$60 a barrel for the first time in more than a year Monday with investors growing increasingly optimistic about demand as the global economy recovers from the coronavirus pandemic.
The commodity climbed 1.26% to US$60.19 a barrel – its highest since January last year – as asset markets rallied on the back of vaccine rollouts, slowing virus infections and hopes that President Joe Biden’s huge stimulus proposal will be passed by US lawmakers.
Crude has been on the rise for weeks as Biden pushes his US$1.9 trillion rescue package, which includes big cash handouts and a hike in the minimum wage.
Treasury Secretary Janet Yellen said that if the spending package was passed in its entirety, “we would get back to full employment next year”.
Adding to the upbeat mood is data showing new infection rates, with last week seeing the lowest since October, while governments begin to get to grips with inoculations. Hopes for the long-term outlook overshadowed figures showing a rise in US inventories.
“Oil traders ignore the sidelines’ spare capacity and continue to take an optimistic view of the US reopening narrative as vaccination protocols should continue to flatten the curve and with the gale-force stimulus tailwinds supporting a spring break reopening, (it’s) providing rocket-fuelled optimism for the oil market,” said Axi strategist Stephen Innes.