By Peter Nurse
Investing.com -- Crude oil prices climbed strongly Tuesday, hitting multi-month highs, helped by signs of a global economic recovery coupled with supply restraint from top producers.
By 9:20 AM ET (1420 GMT), crude oil futures were up 2.4% at $54.98 a barrel, after earlier climbing above $55 for the first time since January 2020, while Brent futures were up 2.7% at $57.83 a barrel.
Gasoline futures were up 2.3% at $1.6308 a gallon.
OPEC crude production increased in January, according to a Reuters survey, with the group producing 25.75 million barrels per day, up 160,000 bpd from December.
However, this growth was smaller than had been expected, and indicated that these top producers were showing some restraint, despite higher prices, after they had agreed earlier in January to ease supply curbs further.
Earlier Tuesday, OPEC's Joint Technical Committee stated that world oil demand is likely to have decreased by 9.72 million bpd in 2020 but is expected to increase by 5.60 million bpd this year.
Growth data from the eurozone, released earlier Tuesday by the European Union's statistics office Eurostat, showed that the region’s economy contracted less than expected in the fourth quarter of 2020 amid pandemic-induced lockdowns.
While Eurostat sees a steeper decline in the first quarter of this year, the European Union predicted a surge in the domestic supply of Covid-19 vaccines during the second quarter, thus increasing the potential for a sharp rebound in growth.
The U.S. reported 4.0% annualized growth in the final quarter of 2020 last week, while China’s GDP expanded 6.5% in the fourth quarter of 2020.
In corporate news, U.K.-based oil giant BP (NYSE:BP) reported a small profit of $115 million in the fourth quarter, resulting in a full-year loss of $5.7 billion, its first in a decade.
CEO Bernard Looney also flagged a weak start to 2021, but added that oil demand is still expected to recover in 2021, with global inventories expected to return to their five-year average by the middle of the year.
U.S. equivalent Exxon Mobil (NYSE:XOM) also reported its first annual loss in 40 years. Still, it was keen to make sure it maintained its quarterly dividend, cutting its 2021 capital program to $16 billion-$19 billion, from the 2020 target of $23 billion.
Traders now await crude oil supply data from the American Petroleum Institute, due later Tuesday, especially after last week’s hefty draw.