Oil prices have experienced a revert to pre-pandemic levels having hit an all-time low last year.
While demand for oil is still lower than normal, the rolling out of vaccines have positively affected the oil prices, leaving in its wake hopes of a speedier than expected economic recovery.
“Black gold” has now reached $60 a barrel having risen more than 50% in the last few months.
Brent crude, the major benchmark for oil, has seen strong growth recently with contracts based on the price of future delivery jumping to 59% since November.
West Texas Intermediate (WTI), the benchmark for US oil, last week rose above $55 a barrel for the first time since the pandemic.
Crude futures gained 3.4% to 374.5 yuan a barrel on the Shanghai International Energy Exchange.
Trafigura is “shifting significant volumes of crude oil at the moment,” Ben Luckock, co-head of oil trading, said on Friday in a series of bullish comments on the market outlook. However, Gunvor sees gains beyond $60 a barrel as unlikely because it would prompt energy companies to boost output.
U.S. crude stockpiles fell by 250,000 barrels last week, according to the median estimate in a Bloomberg survey. If confirmed by official data on Wednesday, that would be a third straight weekly decline. However, gasoline inventories may see a build of 2.1 million barrels.
Vandana Hari, founder of Singapore-based oil markets data firm Vanda Insights told BBC that the biggest driver for the latest surge in prices could be attributed to the steady win against the pandemic.
“Demand has been rising in parts of the world, particularly Asia. We are quite optimistic about what it is that we are seeing in China,” Royal Dutch Shell chief executive Ben van Beurden said last week.
Other factors have also played their part to push up prices such as efforts by oil-producing nations, particularly Saudi Arabia, to limit output.
Since agreeing to the cut in production last April, producers have held back a cumulative 2.1 billion barrels of oil, leading to decreasing stockpiles.
The coronavirus crisis has been devastating for the petroleum industry, and last year prices slumped below zero with more than one billion surplus barrels.