Oil prices climbed on Friday to their highest levels in a year, extending a run of strong gains this week, boosted by the continued commitment of producers to hold back crude supply and positive signs of economic growth in the United States.
U.S. West Texas Intermediate (WTI) crude futures jumped 51 cents, or 0.9%, to $56.73 a barrel by 0210 GMT, after touching a high of $56.75, the most since Jan. 22 last year. The benchmark contract is on track for a weekly gain of nearly 9%, which would be its biggest weekly gain since October.
Brent crude futures climbed 45 cents, or 0.8%, to $59.28 a barrel, after hitting a high of $59.32, its highest since Feb. 20 last year. Brent is on track to rise 6% this week.
Markets were encouraged by stronger-than-expected orders for U.S. goods in December, pointing to strength in manufacturing, and hopes for swift approval by lawmakers of President Joe Biden's proposed $1.9 trillion coronavirus aid plan.
"OPEC+ discipline has been a real positive," said Michael McCarthy, chief market strategist at CMC Markets, referring to the Organization of the Petroleum Exporting Countries and allies led by Russia, together called OPEC+. The alliance this week reaffirmed its support for deep supply cuts which have helped to bring down swollen global crude stockpiles.
"And then when we have signs of better economic growth, then it's up and away (for prices)," said McCarthy.
Chinese demand for crude oil is also helping support the market, as shown by industry tracking two tankers of North Sea crude oil heading to China for March 22 and March 24, said Axi global market strategis Stephen Innes.
"When demand drives commodity prices, it has a more bullish impact and leaves a more lasting reflection on price action," Innes said in a note.