Brent Climbs Above $60 With Trading Houses Divided on Rally - Bloomberg

Brent Climbs Above $60 With Trading Houses Divided on Rally - Bloomberg

Oil in London extended gains above $60 a barrel for the first time in more than a year in a rally that’s dividing the world’s top oil trading houses.

Global benchmark Brent futures surged as much as 2.2% on Monday. Surpassing the key marker is another milestone in a stellar comeback from the depths of the pandemic, which forced countries to lock down and devastated economies. Trading house Trafigura Group sees prices moving even higher as refiners increase processing rates to meet rising product demand amid tight physical crude supplies.

However, with a full-fledged demand recovery yet to take a shape, futures may have rallied too far too fast, especially with key technical indicators signaling crude is in overbought territory. The world’s largest independent oil trader, Vitol SA, and rival Gunvor Group Ltd. both expressed caution over the recent rally.

“Be concerned all you want, but oil prices continue to rip,” said Bob Yawger, head of the futures division at Mizuho Securities. “There are some good demand-side factors and some good supply-side factors, which are all conspiring to push prices higher. But they could trade lower fast at any given moment.”