Oil Has Best Week in Four Months With Saudi Cut Buoying Prices - Bloomberg

Oil Has Best Week in Four Months With Saudi Cut Buoying Prices - Bloomberg

Oil posted the biggest weekly gain since late September as Saudi Arabia’s plan to slice output spurred a surge in physical crude buying.

Futures in New York advanced $3.72 this week and Brent oil topped $55 a barrel for the first time since February. Saudi Arabia’s pledge earlier this week to cut production by 1 million barrels a day in February and March has made for a tighter supply outlook sooner than anticipated. Meanwhile, prospects for additional stimulus under a Biden administration spurred broader market gains.

Saudi Arabia’s surprise cut appears to have caught some Asian buyers by surprise and demand for U.S. crude for export to Asia has gained this week. Unipec, the trading arm of China’s largest refiner, bought its eighth cargo of North Sea crude in a pricing window run by S&P Global Platts this week and was seeking more in what may be the heaviest buying of its kind on record.

“The decision by the Saudis was a big deal and it’s an underpinning for prices,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis. “Clearly, maintaining the oil price was paramount and they were willing to let others take advantage in order to accomplish that.”

PRICES Brent for March settlement advanced $1.61 to end the session at $55.99 a barrel West Texas Intermediate for February delivery rose $1.41 to settle at $52.24 a barrel. Both benchmarks are at the highest since late February