Oil tops $72 a barrel to hit two-year high

Oil has extended recent gains, topping $72 a barrel for the first time since 2019, as OPEC+ supply discipline and recovering demand countered concerns about patchy Covid vaccination rollout around the globe.

The Organisation of the Petroleum Exporting Countries and its allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed US crude inventories dropped more than expected last week.

Oil extended gains after US jobs figures showed those employed grew by 559,000 last month. The US dollar weakened after the report, making oil cheaper for holders of other currencies and lending support to oil prices.

"After much dilly-dallying, Brent appears to have found a new home above $70," said Stephen Brennock of oil broker PVM. 

"Summer and the reopening of the global economy is bullish for oil demand in the second half of the year," he said.

Also boosting oil this week was a slowdown in talks between the US and Iran over Tehran's nuclear programme, which reduced expectations of a return of Iranian oil supply.

"The fifth round of negotiations will heat up next week and that should keep oil prices supported as Tehran will stick to their red lines for restoring the nuclear deal," another US analyst said.

- Reuters