Oil rose more than 1% on Monday as China’s economic figures and US vaccination rates signal a strong recovery in demand in the world’s two largest economies.
However, investors remain wary of record-breaking infection rates and higher OPEC + oil supply in India, the third largest fuel importer worldwide.
Brent crude oil rose 80 cents, or 1.2%, to drop to $ 67.56 a barrel. The US West Texas Intermediate rose 91 cents, or 1.4%, to drop to $ 64.49 per barrel.
Good news is expected from the United States and China, the world’s two largest oil consumers, about the recovery of pandemic conditions.The data show that about a third of US citizens are fully vaccinated. It is also a positive development that China’s crude oil imports broke an average seasonal record in February and March due to increased auto sales, recovery in local travel and strong industrial backdrop.
Even if COVID-19 cases hit record levels this week, oil prices have risen even more with increasing numbers of vaccinations in developed markets. The latest data point to the high effectiveness of vaccines in preventing infections and deaths.
Still, cases of coronavirus are on the rise in some parts of the world, such as India. India reported more than 300,000 new coronavirus cases on Monday, day 12. The new wave of the virus caused a drop in fuel sales in April. Tensions in India are currently stopping oil prices from rising further.
Brent has risen almost 30% this year from a historic low last year, when the Organization of Petroleum Exporting Countries and its allies cut production.
However, OPEC + decided to stick to its plan to slightly increase the supply from May 1 last week, and OPEC’s output rose in April, with an increase from Iran.
Tehran and the world powers are negotiating to revive the 2015 nuclear deal, which could contribute to the global oil supply if a deal is reached.
