Oil prices edged higher on Thursday, hitting 11-month peaks as markets remained focused on Saudi Arabia's unexpected pledge to deepen its oil cuts and firmer equities, shrugging off political unrest in the United States.
Brent crude rose 18 cents to $54.48 a barrel by 1:32 p.m. EST (1832 GMT) after touching $54.90, a high not seen since before the first Covid-19 lockdowns in the West.
US West Texas Intermediate (WTI) was up 24 cents to $50.87, after hitting a session high at $51.28.
On Wednesday, a mob of President Donald Trump's supporters stormed the US Capitol after he urged them to protest Congress's validation of his election loss. Crude futures prices briefly dipped during the unrest.
Oil prices have been supported this week by a pledge by Saudi Arabia, the world's biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March.
"By next month, this bull market could re-establish into higher levels mainly with the benefit of Saudi Arabiaâ€™s unexpected voluntary 1 million bpd production cut," Ritterbusch added.
Seven North Sea crude cargoes were bought and sold in the trading window operated by Platts on Thursday, a record amount that trade sources say may reflect tighter supply after the surprise cut.
UBS analysts raised their forecast for Brent to $60 per barrel by mid-year, citing the Saudi output decision.
"Saudi Arabia ...intimately knows the relationship between the oil price and the global inventory levels. Lower inventories equal higher prices," SEB chief commodity analyst Bjarne Schieldrop said.
Global equities were higher as investors believe US
President-elect Joe Biden would be empowered to spend more freely following victories by two Democrats senators in Georgia that gave them control of both chambers of US Congress.
"Expected stimulus measures under a Biden administration that will likely include significant infrastructure investment represents a supportive consideration capable of boosting gasoline and diesel demand," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.