Oil hits 13-month highs as market rebalances

LONDON (Reuters) - Oil prices soared to their highest in about 13 months on Monday as vaccine rollouts promised to revive demand and producers kept supply reined in.

Brent crude was up 70 cents, or 1.1%, at $63.13 a barrel at 12:15 p.m. EST (1715 GMT) after hitting a session peak of $63.76, its highest since Jan. 22 last year.

U.S. West Texas Intermediate (WTI) crude futures gained 63 cents, or 1.1%, at $60.10 after touching $60.95, the highest since Jan. 8 last year.

Oil prices gained about 5% last week.

U.S. markets were closed Monday for the Presidents Day holiday.

Prices have rallied over recent weeks on tightening supplies, largely due to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the wider OPEC+ group of producers.

Russian Deputy Prime Minister Alexander Novak said the global oil market is on a recovery path and prices this year could average $45-$60 a barrel.

“We’ve seen low volatility in the past few months. This means the market is balanced and the prices we are seeing today are in line with the market situation,” Novak was quoted as saying.

Meanwhile, U.S. President Joe Biden has pushed for the first major legislative undertaking of his term, turning to a bipartisan group of local officials on Friday for help on his $1.9 trillion coronavirus relief plan.

“The long-awaited $1.9 trillion package has not been passed. As the latest U.S. job data hints at a struggling labor market the relief package cannot come soon enough for some,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

“The stimulus will likely be approved in some shape or form,” he added.

In a move that could tighten supply further, workers will decide on Monday whether to strike this week at Norway’s largest oil loading terminal. A strike could disrupt production at fields responsible for a third of the country’s crude output.

U.S. production could be affected this week as well by unusually cold weather in Texas and Oklahoma. Temperatures in Midland, Texas, the heart of the U.S. Permian Basin, the country’s largest shale region, dropped into single digits Fahrenheit.

Millions of people were without power and some refineries curtailed processing as well due to the cold, which ranged from 21 to minus 8 degrees Fahrenheit (minus 6 to minus 22 Celsius).

Reporting by Noah Browning and Yuka Obayashi; Editing by Jason Neely, David Goodman and Richard Chang