LONDON: The benchmark oil contract Brent North Sea rose above $60 per barrel yesterday to hit the highest level since the coronavirus pandemic began to spread globally almost a year ago. Oil prices have recovered owing to OPEC and its allies cutting production after the coronavirus pandemic slashed demand, according to analysts.

"It is worth reminding oneself that OPEC+ is the single most important reason for why the oil price reached $60" on Monday, noted Bjarne Schieldrop, chief commodities analyst at SEB Research. "It is because of large cuts by OPEC+... since May," he added. Crude and other assets are winning support also from the prospect of a $1.9-trillion US stimulus package. European and Asian stock markets also climbed Monday, while the dollar rose against its main rivals.

Adding to the upbeat mood is data showing new COVID infection rates, with last week seeing the lowest level since October, while governments begin to get to grips with inoculation programs. Brent crude hit $60.27 per barrel yesterday, the first time it has exceeded $60 since February 2020. After lockdowns began to spread in March, oil prices dropped off a cliff, with US oil contract WTI even briefly turning negative. And despite production cuts, oil supplies remain high.

"Global oil demand is still hurt badly by the global pandemic," added Schieldrop. Recovery in part relies on US lawmakers approving President Joe Biden's huge stimulus package that should help the jobs market. Figures last week showed the US economy created less than half the number of jobs expected last month, which analysts said reinforced the need for a new, big spending bill. Treasury Secretary Janet Yellen on Sunday warned that the US job market was "stalling" and might not recover for years without support.

But she told CNN that if the spending package was passed, "we would get back to full employment next year". Despite the weak jobs reading, all three main indices on Wall Street ended on a positive note Friday, with the Nasdaq and S&P 500 clocking up new records. "Markets are continuing last week's bullish momentum, with Friday's jobs report providing a fresh reminder of the need to push a major stimulus package across the line," said Joshua Mahony, senior market analyst at IG trading group. -AFP