Oil prices rise to fresh multi-year highs on fuel demand recovery

Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs.

Brent crude futures edged up 13 cents to $72.65 a barrel to 1145 GMT, a day after closing at their highest since May 2019.

US West Texas Intermediate (WTI) crude futures were up 14 cents to $70.43 a barrel, a day after their highest close since October 2018.

US investment bank Goldman Sachs expects Brent crude prices to reach $80 per barrel this summer as vaccination rollouts boost global economic activity.

The International Energy Agency said in its monthly report that Opec+ oil producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

“Opec+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based energy watchdog said.

It said that rising demand and countries' short-term policies were at odds with the IEA's call to end new oil, gas and coal funding.

"In 2022 there is scope for the 24-member Opec+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target," the IEA said.

Data showing road traffic returning to pre-Covid-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.

"Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol," ANZ analysts said.