(Bloomberg) – Oil surged the most in more than two weeks amid a weaker dollar and as major time spreads increased with expectations of further drops in supply at the states’ largest storage facility -United

New York futures rose 2.9% on Monday and Brent crude approached the key psychological bar of $ 75 a barrel. US stocks rose and the dollar fell, increasing the appeal of commodities denominated in the currency. Investors are watching for comments from Federal Reserve officials this week after James Bullard of St. Louis said interest rates may have to rise in 2022.

US weather spreads widened, indicating tighter supply. The rapid spread of West Texas Intermediate crude – an indicator of market health – shifted to the deepest offset structure since about 2018 on Monday. Spreads further along the curve hit their highest level in about seven years.

Data provider Genscape Inc. reported a 2.6 million barrel drop in Cushing, Oklahoma last week, according to people with knowledge of the report. Supplies at the hub are already at their lowest since March 2020.

“The stars have lined up here in favor of the bulls in a big way,” said John Kilduff, partner at Again Capital LLC.

U.S. crude futures have risen more than 10% so far this month, as major economies emerge from restrictions and lockdowns after Covid-19 vaccinations roll out. Consumption rebounded, particularly in the United States, Europe and parts of Asia. By August, global oil demand could surpass the record 100.8 million barrels per day reached in August 2019 due to pent-up demand for leisure activities, according to Citigroup Inc. Meanwhile, Bank of America Corp. said futures contracts could reach $ 100 a barrel next year. .

“With the lingering expectations of a fairly strong rebound in demand in the second half of the year and a very disciplined OPEC +, it looks, at least for now, that we are likely to get tighter,” said Bart Melek, chief strategy officer for commodities at TD Securities.

Beyond WTI’s rapid spread, other calendar spreads also rallied, signaling longer-term strength. WTI’s September contract is trading over $ 1 above its October contract, the strongest since around 2014.

Traders are also monitoring the state of talks between Iran and other nations. So far, nuclear talks have been inconclusive between the world powers and Iran – which has elected a new uncompromising president – ruling out prospects of a rapid recovery in Islamic Republic’s crude exports.

Diplomats postponed a sixth round of meetings with significant loopholes remaining to fix the Iran nuclear deal, the third time since talks began in April that negotiators have missed self-imposed deadlines to rejuvenate the agreement. President-elect Ebrahim Raisi has also ruled out a meeting with US President Joe Biden.

The failure to strike a deal puts additional pressure on other members of the OPEC + coalition, which is meeting next week to consider restoring more oil production.

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