UPDATE 6-Oil edges higher on U.S. stimulus hopes, tighter supplies

* Brent, U.S. crude on track for weekly gains
* Lunar New Year travel in China dives 70% from 2019
* Coming up: Baker Hughes U.S. rig count at 1 p.m. EST/1800
GMT

(New throughout, updates prices, market activity and comments)
By Devika Krishna Kumar
NEW YORK, Feb 12 (Reuters) - Oil prices climbed more than 2%
to fresh highs on Friday, buoyed by hopes for a U.S. stimulus
bill and as supplies tighten, driven by output cuts by the
world's top producers.
Brent crude LCOc1 was up $1.61, or 2.6%, at $62.75 a
barrel by 12:26 p.m. ET (1726 GMT) after rising to a session
high of $62.83, the highest since Jan. 22, 2020. U.S. oil CLc1
was up $1.49, or 2.6%, at $59.73 after rising to a session high
of $59.82, the highest since Jan. 9 2020.
U.S. crude was on track for a weekly gain of about 5.1%
while Brent was set for a 5.8% rise on the week.
U.S. President Joe Biden will meet with a bipartisan group
of mayors and governors as he keeps pushing for approval of a
$1.9 trillion coronavirus relief plan to bolster economic growth
and help millions of unemployed workers.
All three major U.S. stock indexes were on course for their
second straight weekly rise. A sharp drop in new COVID-19 cases
and hospitalizations buoyed hopes life will eventually return to
normal. "Expected U.S. stimulus and ongoing vaccine progress is
likely to maintain appetite for risky assets in offering support
to the oil market," said Jim Ritterbusch, president of
Ritterbusch and Associates in Galena, Illinois.
Oil prices have risen over recent weeks partly owing to
production cuts from the Organization of the Petroleum Exporting
Countries (OPEC) and allied producers in the group OPEC+.
"Oil prices held onto their recent gains this week, buoyed
by further signs that crude stocks, particularly in the U.S.,
are falling," Capital Economics analysts said in a note.
"We anticipate that inventories will fall further later this
year as transport fuel demand revives in tandem with the easing
of virus-related restrictions on travel."
Still, OPEC this week ratcheted down expectations for global
oil demand to recover in 2021, trimming its forecast by 110,000
barrels per day (bpd) to 5.79 million bpd. The International Energy Agency (IEA) said oil supply was
still outstripping global demand, though COVID-19 vaccines are
expected to support a demand recovery. "The (IEA) report paints a more pessimistic picture than
market participants have presumably been envisaging given the
current high prices," Commerzbank said.
Demand data from the world's biggest oil importer also
paints a bleak picture.
The number of people who travelled in China ahead of Lunar
New Year holidays plummeted by 70% from two years ago as
coronavirus restrictions curbed the world's largest annual
domestic migration, official data showed. ABN Amro revised its 2021 Brent oil prices forecast slightly
higher to $55 a barrel but warned of demand headwinds.
"The biggest recovery in demand will have to come from the
aviation sector," the bank said. "Especially for aviation, we do
not yet see a major recovery this year."

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GRAPHIC: Demand/supply balance https://tmsnrt.rs/3d0yzmK
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