Oil extended its three-week gains and rallied on Monday, supported by the improving outlook for fuel demand as increased COVID-19 vaccines helped lift travel restrictions and tighten supply.
Brent crude rose 51 cents, or 0.7%, to $73.20 a barrel as of 0644GMT, its highest level since May 2019. West Texas Intermediate (WTI) rose 47 cents, or 0.7%, to $71.38 a barrel, its highest level since October 2018.
Vehicle traffic is returning to pre-pandemic levels in North America and most of Europe, flights have increased and anti-coronavirus quarantines and other restrictions have been eased. Three-week increases were recorded in oil benchmarks.
In the short-term, crude oil prices suffer positive headwinds of demand in Europe and negative headwinds in India, while the oil market is in up and downs.
However, the underlying trend is still in an intact position and deep pullbacks, dips look like opportunities to buy.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have slashed production to support prices after the pandemic swept away demand in 2020, with strong alignment with targets to date.
In its monthly report on Friday, the International Energy Agency (IEA) argues that the group must increase production to ensure that world oil markets are adequately supplied and to meet recovering demand.
Some market commentators say Brent expects to rise to $80 a barrel this summer as vaccines boost economic activity worldwide.
Operations of US oil wells are said to have risen to 365, the highest level since April 2020. The increase of six was the largest weekly increase in oil rigs in a month as drilling companies seek to capitalize on increased demand.