Oil prices gained more than $60 a barrel for the first time in more than one year, supported by tightening global supplies among big producers and hopes for further US economic stimulus measures.

Reuters reported that brent crude futures for April touched an intraday high of $60.06 a barrel, the highest since January last year.

Oil has been rallying since the end of October after Saudi Arabia pledged to deepen output cuts and amid COVID-19 vaccine breakthroughs.

The kingdom's pledge of extra supply cuts in February and March on the back of reductions by OPEC members and its allies, including Russia, is supporting prices.

"A confluence of vaccine optimism, US stimulus, prospects of a weaker US dollar, stern OPEC+ discipline and Biden’s bullish energy actions is roaring the front-end of the oil curve forward," MUFG said in a note.

According to Japan's top bank, the market rebalancing continues, with an expected deficit throughout 2021, given stern OPEC+ discipline, tepid non-OPEC+ growth and the ongoing robust economic recovery spurring oil demand, helping to reduce the prevailing large inventory overhang.

"An end to "Trumpian uncertainty" will accelerate global economic growth with the new Biden administration providing a further fillip to oil demand through an elimination of many if not most Trump bilateral trade barriers (beyond China) as well as a return to the WTO," it said.

However, International Energy Agency (IEA) has cut its forecasts for demand in 2021 by 280,000 barrels a day to 5.5 million barrels a day.

While global efforts to roll out vaccines for the coronavirus are underway, and are expected to bring an end to the movement restrictions that battered oil demand in 2020, spiraling infection rates have sparked a return to lockdowns in some countries, delaying the expected rebound in demand, the IEA said.

"Border closures, social distancing measures and shutdowns, among other policies, will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year," the IEA said.

(Reporting by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@refinitiv.com)

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