Brent crude strong despite concerns about patchy Covid-19 vaccination rollout around the globe

Oil rose towards $72 a barrel on Friday, trading close to a two-year high as Opec+ supply discipline and recovering demand countered concerns about patchy Covid-19 vaccination rollout around the globe.

Opec and allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed US crude inventories dropped more than expected last week. Brent crude rose 33 cents, or 0.5%, to $71.64 a barrel by 8:12am GMT. It reached an intra-day high of $71.99 on Thursday for its highest since May 2019.

US West Texas Intermediate crude was up 22 cents, or 0.3%, at $69.03.

“After much dilly-dallying, Brent appears to have found a new home above $70,” said Stephen Brennock of oil broker PVM.

“Summer and the reopening of the global economy is bullish for oil demand in the second half of the year.”OPINION: Oil on a roll for the lucky few, but energy transition is for realOPINION: Big oil feels the heat in landmark weekFor the week, Brent is on track for a gain of more than 2.8% and US crude is heading for a 4% rise.

Also boosting oil this week was a slowdown in talks between the US and Iran over Tehran’s nuclear programme, which reduced expectations for a rapid increase in supply of Iranian oil to the market.

In focus later on Friday will be US jobs figures for May. The consensus forecast for non-farm payrolls, due at 12:30pm GMT, is that about 650,000 jobs were added in May.

While rising demand and the fast pace of Covid-19 vaccinations in countries such as the US has boosted oil, a slower inoculation rollout and high infections in the likes of Brazil and India are hitting demand in high-growth oil markets.

India, the world’s second most populous country, has vaccinated only 4.7% of the adult population and is reeling from a second wave of infections.(Copyright)