Oil extends its weekly gain with Brent pushing to $60

Bloomberg

Oil set a fresh one-year high in New York with continued producer supply curbs helping spur strength everywhere from physical markets to the futures curve.
Futures gained 1.1% in New York to the highest since late January 2020, while Brent crude remained just under $60 a barrel in London. The number of vessels sailing towards China jumped to a six-month high, suggesting the world’s largest importer may be piling back into the oil market. Meanwhile, crude stockpiles tied to oil futures in China fell to the lowest since June 2020, according to data analytics company OilX, the latest sign of ebbing inventories.
Crude was buoyed by a pledge from the Organization of Petroleum Exporting Countries and its allies to keep draining a virus-driven surplus. Expectations of a global
economic recovery this year are also raising forecasts for stronger oil demand, even though lockdown measure are restricting mobility in the meantime. At the same time, more money is flowing into the space with investor holdings of West Texas Intermediate futures soaring to the highest since 2018.
Underpinning oil’s climb to one-year highs has been a sharp movement of the futures curve into a bullish backwardation structure.

The key premium on West Texas Intermediate crude’s nearest December contract over the following December widened out past $3 a barrel to the strongest level in a year. In the options market, there has been large betting that the curve will widen further into backwardation through the end of the year, according to exchange data compiled by Bloomberg.
Meanwhile, Royal Dutch Shell Plc led a buying binge earlier this week in the North Sea market, snapping up the most cargoes on an S&P Global Platts by a single company since at least 2008.
“OPEC has done a good job of complying with the cuts that they said they were going to make, which couldn’t always be counted on in the past,” said Stewart Glickman, energy equity analyst at CFRA Research. “They seem to be, mainly because of Saudi’s help, sticking to a fairly hard line on production.”