Oil prices are up more than 1% as sentiment improves on demand hopes

Oil prices rose more than 1 percent today, Monday, while Chinese economic figures and vaccine distribution rates in the United States indicated a strong recovery in demand in the two largest economies in the world.

But investors remain wary due to record rates of HIV infection in India, the world’s third largest importer of fuel, as well as rising crude supplies from the OPEC + group.
Brent crude ended the world record for the nearest trading session maturity, up 80 cents, or 1.2 percent, to settle at $ 67.56 a barrel.

U.S. West Texas Intermediate crude futures rose 91 cents, or 1.4 percent, to settle at $ 64.49 a barrel.

The United States and China, the two largest consumers of oil in the world, are expected to lead a recovery in demand from the Coronavirus pandemic.

A report from Bank of America Global Research said, “Even with Covid-19 cases registering record levels this week, oil prices are heading to rise due to the increasing numbers of vaccines in developed markets.”

About a third of the US population has received a full vaccination.

On the other hand, China’s average imports of crude oil hit a seasonally high record in February and March, supported by an increase in auto sales, a recovery in domestic travel, and a strong industrial background.

However, parts of the world, such as India, are seeing an increase in coronavirus infections.

Today, the Asian country announced more than 300,000 new HIV infections for the twelfth consecutive day. The new wave of the virus led to a drop in fuel sales in April.

“India’s tensions are currently preventing oil prices from continuing to rise,” said Louise Dickson of Rystad Energy.

Brent has registered gains of 30 percent since the start of the year, recovering from historic low levels, which it plunged to last year, thanks to record cuts in supplies from the Organization of the Petroleum Exporting Countries and its allies who together make up the so-called OPEC + group.

But the group decided last week to stick to a plan to gradually increase supplies from May 1, while a Reuters survey showed a jump in OPEC production in April due to an increase in Iran’s production.