Crude Oil Soars to Two-Year Highs on Demand Recovery Hopes



© Reuters.

By Peter Nurse   

Investing.com — Crude oil prices rose Monday, hitting their highest levels in more than two years, boosted by renewed confidence in the economic revival and an associated jump in oil demand.

By 9:05 AM ET (1305 GMT), was up 0.9% at $71.56 a barrel, its highest since October 2018, while was up 0.9% at $73.33, its highest since May 2019.

U.S. Gasoline RBOB Futures were up 0.3% at $2.1930 a gallon.

Oil prices have gained over 40% this year to date, supported by economic recovery and the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate.

“The June preliminary reading for the University of Michigan consumer sentiment index shows confidence moved higher” on Friday, said analysts at ING, in a research note. “This is encouraging for the growth outlook given the historically strong correlation between the overall expectations indicator and consumer spending.”

Additionally, U.S. daily air travelers have topped 2 million for the first time since the pandemic began with traffic returning to pre-pandemic levels in North America and much of Europe as lockdowns and other restrictions are being eased, even if England does decide to delay its full reopening later Monday.

The International Energy Agency predicted last week that global oil demand will recover to pre-pandemic levels late next year, tying in with a bullish forecast from the Organization of the Petroleum Exporting Countries that demand in 2021 would rise by 5.95 million barrels per day, up 6.6% from a year earlier.

Also helping the tone was the tone of cooperation at the weekend’s G7 summit, where the world’s wealthiest democracies announced plans to donate 1 billion vaccine doses to poor nations.

See also  M&S and Ocado cause anger with different pricing on same items

As far as additional supply from Iran is concerned, the Persian Gulf country said earlier Monday that it has reached a broad agreement with the U.S. over the lifting of sanctions on its industrial sectors, including energy, but warned there was “very little time left” for world powers to revive a 2015 nuclear deal.

Even with the market trading at these elevated levels, traders seem optimistic about the scope for further gains. Friday’s weekly data from the showed that WTI positioning was at the most bullish in about three years.

One potential note of caution, U.S. oil rigs in operation rose by six to 365, the highest since April 2020, energy services company said in its weekly report on Friday.

It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

See also  Oil surges as Saudi attack focuses market on supply risks





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here