Oil extends its optimism gains in the face of US and European reopening
Oil rig at sunset near the shores of the Mediterranean port of Limassol.
Danil Shamkin | NurPhoto | Getty Images
Oil prices soared on Tuesday, extending gains from the previous day, as optimism over the reopening of the US and European economies outweighed fears of a slowdown in fuel demand in Asia due to the surge cases of COVID-19 and a new wave of restrictions.
Brent crude oil futures were up 20 cents, or 0.3%, to $ 69.66 a barrel at 2:31 a.m. GMT, while West Texas Intermediate (WTI) was up 19 cents, or 0.3%, at $ 66.46 per barrel.
Both contracts rose more than 1% on Monday.
“The market has remained in a tight trade range amid the tussle between concerns over the spread of coronavirus infection cases in Asia and optimism of economic reopenings in Europe and the United States thanks to vaccinations,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
âIn addition, certain expectations that the negotiations between Iran and the United States could lead to a resumption of Iranian oil exports are limiting the rise in oil prices,â he said.
Britain’s economy has reopened, giving 65 million people a measure of freedom after a four-month lockdown against COVID-19. And with accelerating vaccination rates, France and Spain have eased restrictions, and Portugal and the Netherlands have opened up travel.
In the United States, New York state will no longer need masks in most public spaces for people fully vaccinated against COVID-19 starting Wednesday, and other regions are also opening their economies.
In Asia, by contrast, Singapore has reported the highest number of local infections in months and Taiwan has seen a spike in cases, and both countries have reinstated lockdowns.
In India, the second country hardest hit by the pandemic, domestic sales of gasoline and diesel by state refiners fell by a fifth in the first half of May compared to a month earlier then that pandemic lockdowns were hitting industrial activities and consumption, according to preliminary data on Monday.
As for the talks between Iran and the United States, as the United States tries to reinstate the 2015 Iran nuclear deal, it tiptoes through a minefield of sanctions imposed by the former US President Donald Trump after abandoning the deal three years ago.