Oil Up, Near Two-Year High as U.S., European Fuel Demand Outlook Improves

© Reuters.

By Gina Lee

Investing.com – Oil was up Tuesday morning in Asia, near a two-year high as key economies such as the U.S. and Europe continue their economic recovery from COVID-19 and drive fuel demand, which offset the dimming demand in parts of Asia due to the recent COVID-19 outbreaks in the continent.

were up 0.29% to $69.66 by 11:49 PM ET (3:49 AM GMT) and gained 0.30% to $66.48.

The black liquid has jumped more than 35% in 2021 due to an improving fuel demand outlook as the rollout of COVID-19 vaccines drives the economic recovery in key economies and boosts mobility.

U.S. airports recorded 1.85 million passengers on Sunday, the highest number since the beginning of COVID-19 in early March 2020, according to Transportation Security Administration data. It indicated a domestic travel revival that will boost fuel demand.

In Europe, the U.K. reopened businesses and further eased a four-month COVID-19 lockdown. France and Spain have relaxed restrictions while Portugal and the Netherlands have opened up travel.

However, investors remained concerned about new outbreaks of COVID-19 in parts of Asia, including Taiwan and Singapore.

The number of COVID-19 cases in India, the world’s third-largest oil importer, closed in on 25 million as of May 18, according to Johns Hopkins University data. Preliminary data showed that India’s domestic sales of gasoline and diesel by state refiners slid 20% in the first half of May from the previous month.

“The market remained in a tight trading range amid the tug-of-war between worries over spreading COVID-19 infection cases in Asia and optimism from economic re-openings in Europe and the U.S. thanks to vaccinations,” Hiroyuki Kikukawa, general manager of research at Nissan (OTC:) Securities, told Reuters.

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Talks between the U.S. and Iran to reinstate the pair’s 2015 nuclear deal are also ongoing.

“Some expectations that negotiations between Iran and the U.S. may lead to a resumption of Iranian oil exports is limiting the upside of oil prices,” Kikukawa added.

Investors now await , due later in the day.

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