Crude oil nears $70 a barrel

Easing Western lockdowns boost summer demand outlook

Thursday, 6 May 2021

NEW YORK, May 05 (Reuters): Crude oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of Covid-19 infections in India and Japan.
India and Japan are the world's third and fourth largest oil importers and consumers.
Brent crude increased by 93 cents, or 1.4 per cent, to $69.81 per barrel at 1008 GMT on Wednesday.
US West Texas Intermediate (WTI) crude increased by 85 cents, or 1.3 per cent, to $66.54 a barrel.
Both contracts hit the highest level since mid-March in intra-day trade.
"A return to $70 oil is edging closer to becoming reality," said Stephen Brennock of oil broker PVM.
Brennock said the jump in oil prices came amid expectations of strong demand as western economies reopened. "Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high," he said. Crude prices were also supported by a large fall in US inventories. The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.
Traders are awaiting data from the US Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.
"If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January," Commonwealth Bank analyst Vivek Dhar said in a note. The rise in oil prices to nearly two-month highs has been supported by Covid-19 vaccine rollouts in the United States and Europe.