The front-month Brent futures contract traded past $60 a barrel early Monday for the first time in over a year, boosted by hopes for further U.S. economic stimulus measures as well as output discipline by top oil producers that has driven global stockpiles steadily downward over recent weeks.
At 3:20 AM ET (0820 GMT), the international benchmark Brent contract for April delivery rose 0.8% to $60.07 a barrel, after earlier hitting a peak of $60.19, its highest level since January last year. U.S. West Texas Intermediate crude futures for March gained 1.2% to $57.54 a barrel, also the highest since January 2020.
Helping the crude market push higher is the expectation of additional U.S. fiscal stimulus, after the House of Representatives on Friday followed the Senate in passing a budget resolution, starting the process that would allow President Joe Biden’s $1.9 trillion rescue package to be approved.
Additionally, Saudi Arabia, the world’s largest exporter of crude, pledged last month to make additional supply cuts in both February and March on the back of reductions by other members of the Organization of the Petroleum Exporting Countries and its allies, including Russia. This move is aimed at balancing the crude market, and thus support prices, given the severe hit to demand caused by the measures taken by governments around the world to limit mobility in the wake of the Covid-19 pandemic.