Optimism over the rate of global vaccine roll out and a pick up in demand is pushing up prices [File: Luke Sharrett/Bloomberg]
Houston, June 22 (RHC)-- Crude oil prices rose on Tuesday, with Brent hitting $75 a barrel for the first time since April 2019, as investors remained bullish about a quick recovery in global oil demand and as concerns eased over an early return of Iranian crude.
Brent crude futures for August climbed 29 cents, or 0.4 percent, to $75.19 a barrel by 06:58 GMT, paring earlier losses. It rose as high as $75.27 a barrel, the strongest since April 25, 2019, earlier in the session.
US West Texas Intermediate (WTI) crude for July was at $73.66 a barrel, unchanged from the previous session. WTI for August climbed 13 cents, or 0.2 percent, to $73.25 a barrel. Brent gained 1.9 percent and WTI jumped 2.8 percent on Monday.
Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. “The market sentiment stays strong with improved outlook for global demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that a rally in Asian stock markets is also helping boost risk appetite among investors.
Global shares on Tuesday extended their recovery from four-week lows as investors focused on prospects for post-pandemic economic growth, rather than fret more over the hawkish stance taken by the U.S. Federal Reserve at a policy meeting last week.
The global crude benchmark has rallied more than 40 percent this year as a strong rebound from the pandemic in the US, China and Europe underpins increasing fuel consumption, although a virus comeback in parts of Asia is a reminder that the recovery will be uneven. Brent may even advance to $100 a barrel next year as travel demand rebounds, according to Bank of America Corp.
“Demand optimism is now well established and a tightening of the market is very much in the spotlight,” said Vandana Hari, the founder of Vanda Insights. “If there is a pause in this rally, it will likely come from the supply side.”
