Oil prices climb on hopes for economic recovery
NEW YORK (Reuters) – Oil prices edged higher on Monday as European economic reopenings and rising U.S. demand helped offset weakness earlier in the session due to surging coronavirus cases in Asia and underwhelming Chinese manufacturing data.
Brent crude rose 56 cents, or 0.8%, to $69.27 a barrel by 11:22 a.m. ET (1522 GMT,) and West Texas Intermediate (WTI) crude was up 63 cents, or 1%, at $66.
The British economy reopened on Monday, giving 65 million people a measure of freedom after a four-month COVID-19 lockdown.
With accelerating vaccination rates, France and Spain have relaxed COVID-related restrictions, and Portugal and the Netherlands on Saturday eased travel restrictions as the holiday season approaches.
The promise of economic growth has supported oil prices in recent weeks, although the pace of inflation has kept many investors concerned about the possible rise of interest rates and fall of consumer spending.
“The news is not all negative on the demand front as the U.S. saw air travel jump on Sunday to 1.8 million people, the highest total since March 2020,” said Edward Moya, senior market analyst at OANDA.
United Airlines also announced they will add 400 daily flights to July for European destinations, Moya noted.
Summer travel bookings rose 214% from 2020 levels, the airline said, adding that it planned to fly 80% of its U.S. schedule compared with July 2019.
Worries about the spread of the coronavirus variant first detected in India are also making investors cautious.
Some Indian states said on Sunday they would extend lockdowns to help contain the pandemic, which has killed more than 270,000 people in the country.
Domestic sales of gasoline and diesel by Indian state refiners plunged by a fifth in the first half of May from a month earlier.
Singapore is preparing to close schools this week and Japan has declared a state of emergency in three more prefectures to contain outbreaks.
“The market is seemingly trapped between observing encouraging improvements in demand in the United States and Europe, and the sluggishness in consumption due to the persistence of COVID-19 in Asia,” StoneX analyst Kevin Solomon said.
China’s factories slowed their output growth in April and retail sales significantly missed expectations as officials warned of new problems affecting the recovery in the world’s second-largest economy.
China’s crude oil throughput rose 7.5% in April from the same month a year ago, but remained off the peak seen in the last quarter of 2020.
U.S. retail gasoline prices hit a fresh seven-year high on Monday, as it will take some time for the nation’s largest fuel pipeline’s supply chain to fully catch up after a cyberattack that resulted in a six-day system outage last week and mass panic-buying.
Source: Read Full Article
