Oil prices hit multi-year highs on Friday. As rising COVID-19 vaccination rates helped lift pandemic restrictions, it closed the third consecutive week on gains with an improving outlook for worldwide demand.
Brent crude futures were up 17 cents to $72.69 a barrel after hitting their highest level since May 2019, up 1% for the week.
US West Texas Intermediate (WTI) crude futures rose 62 cents to $70.91 a barrel, hitting their highest level since October 2018 and up 1.9% weekly.
It seems that demand is coming back faster than supply and more supply will be needed to meet this demand. The time has come for major producers to turn on the taps to ensure that world oil markets are adequately supplied.
In its monthly report, the International Energy Agency (IEA) said the Organization of Petroleum Exporting Countries and its allies must increase production to meet identified demand and return to pre-pandemic levels by the end of 2022.
Meanwhile, countries’ rising demand and short-term policies are in conflict with the IEA’s call to end new oil, gas and coal financing.
Brent crude oil prices are expected to reach $80 a barrel this summer as the introduction of vaccines boosts global economic activity.
Data showing that road traffic in most of North America and Europe is returning to pre-COVID-19 levels is encouraging.
The jet fuel market is also showing signs of improvement, with flights in Europe increasing by 17% over the past two weeks.
U.S. oil rigs rose six this week to 365, hitting their highest level since April 2020 as an indicator of future supply. This was the largest weekly increase in oil rigs in a month.