By Barani Krishnan
Investing.com - Crude prices hit nine-month highs and closed with a fifth straight week of gains as investors piled into oil after OPEC and its allies successfully stage-managed a production hike without rocking the market.
News that vaccine makers were working on supplying as many doses as possible before the end of December to curb Covid-19 also boosted crude prices, amid efforts by U.S. lawmakers to pass a new coronavirus fiscal stimulus.
New York-traded West Texas Intermediate, the leading indicator for U.S. crude, settled Friday’s trade up 62 cents, or 1.4%, at $46.26 per barrel. It earlier hit $46.68, its highest level since March.
For the week, WTI rose 1.6%. That came after November’s whopping 27% gain, which was the U.S. crude benchmark’s best for a month since May.
London’s Brent, the global benchmark for crude, finished the day’s trade at $48.71, up 46 cents, or 1.1%. Brent hit a session high of $49.86, its closest to the key $50 per barrel level it last traded at in February.
Brent’s weekly gain after its 28% rally in November, which was the global oil benchmark’s best for a month since May.
Oil prices have been on a tear over the past month on bets that people across the world might soon be able to travel freely as millions of doses of coronavirus vaccines were being prepared for delivery over the course of the next few weeks, after their approval by U.S. and U.K. health authorities.
“Vaccine optimism should keep the demand outlook healthy for 2021,” said Ed Moya, analyst at OANDA in New York, said in a note on oil.
Crude’s rally was heightened this week by the ability of oil producers within the OPEC+ alliance to add just 500,000 barrels to daily production instead of an initially feared 2 million barrels.
Expectations that the U.S. Congress might agree soon to a Covid-19 fiscal stimulus also boosted the market. Stimulus plans such as these tend to weaken the dollar and boost commodities denominated in the currency, which include oil. The Dollar Index hit a six-year low of 90.47 on Friday.