Oil Climbs Nearly 2% as Travel Seen Rising

OILMONSTER.COM- Oil prices rose nearly 2% on Tuesday after more U.S. states eased lockdowns and the European Union sought to attract travellers, though soaring COVID-19 cases in India capped gains.

Futures strengthened in post-settlement trade after American Petroleum Institute estimates of U.S. crude inventories fell more than expected, according to traders.

Brent crude futures settled at $68.88 a barrel, up$1.32, or 1.95 percent. The global benchmark continued to rise after the API data was issued, and was trading $1.80 at $69.36 a barrel by 4:40 p.m. ET. (2040 GMT)

U.S. West Texas Intermediate (WTI) crude futures rose by $1.20, or 1.86%, to settle at $65.69 after a 1.4% jump on Monday. In post-settlement trade the contract traded up $1.65, or 2.56% at $66.14 a barrel.

"Markets were optimistic coming into the day, boosted by flight movement between U.S. and Europe," said Phil Flynn, senior analyst at Price Futures Group in Chicago. Demand for diesel fuel, including jet, has suffered during the pandemic, weighing down global oil markets.

Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut look to ease pandemic curbs and the EU plans to open up to foreign visitors who have been vaccinated, analysts said.

"Yesterday's stock market strength is being followed through this morning in the oil market ... the market focuses on the successful rollout of vaccine programmes in the U.S. and in other developed countries and not on the devastation in India and Brazil."

Traders saw further signs of rising U.S. crude demand in the API's stockpile data issued late Tuesday. Crude stocks fell by 7.7 million barrels in the week ended April 30. Gasoline inventories fell by 5.3 million barrels and distillate stocks fell by 3.5 million barrels, the data showed, according to the sources, who spoke on condition of anonymity.

The U.S. Energy Information Administration weekly statistics are due to be released Wednesday.

Courtesy: www.reuters.com