(Bloomberg) -- Oil headed for a sixth straight weekly gain, with prices trading near the highest level in seven years, on signs of rising demand.
West Texas Intermediate rose above $87 a barrel in early Asian trading, taking its advance this week to almost 3%. The U.S. benchmark hit the highest since October 2014 on Thursday as Brent topped $91. The surge came despite a jump in the dollar after the Federal Reserve signaled it’s ready to tackle inflation.
Crude has barreled into 2022 as a host of supportive drivers have combined to lift prices. Worldwide oil consumption is continuing to recover from the hit delivered by the coronavirus pandemic, key stockpiles are drawing, and physical crude markets are strong. At the same time, investors are concerned about a possible Russian invasion of Ukraine, which could roil energy flows.
Attention will shift next week to the Organization of Petroleum Exporting Countries and its allies as they meet Feb. 2 to assess the market and decide on supply policy. While the group has been steadily easing output curbs, there’s concern members have been unable to deliver the promised volumes in full.
As crude advances, key product prices have been dragged higher. Wholesale gasoline in the New York market has surged to the highest seasonal level in three decades of record keeping. Average pump prices across the U.S. are headed for a monthly gain after jumping 46% last year.
More and more banks are forecasting that oil’s rally has further to run, with several predicting that crude could surge back into three figures. Among them, Saxo Bank A/S said this week that Brent may rise above $100 a barrel in the second half as global demand is not expected to peak anytime soon.
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