Oil climbs on hopes fuel demand is rising in US and as vaccinations increase

Tokyo — Oil rose on Monday amid hopes that fuel demand is picking up in the US as the summer driving season approaches and the rollout of Covid-19 vaccinations there accelerates, though increasing case numbers in other countries are set to cap gains.

Brent was up 25c, or 0.4%, at $63.20 a barrel by 3.55am. US crude gained 17c, or 0.3%, to $59.49 a barrel.

Prices have changed little since a period of volatile trading ended with the close of trading last Monday.

“An unsettling calm has enveloped oil markets recently as Brent remains anchored around $63 and traders adopt a wait-and-see range-trade mentality,” said Stephen Innes, chief market strategist at Axi.

While the US has fully vaccinated more than 70-million people, and in Europe new infection numbers are falling as lockdowns take effect, India is reporting record new cases and other parts of Asia are seeing caseloads rise.

That is likely to continue to “sully the global travel outlook” and keep prices range bound as the summer approaches, Innes said.

The US economy is at an “inflection point” amid expectations that growth and hiring will accelerate in the months ahead, but faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve chair Jerome Powell said in an interview broadcast on Sunday.

“There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” Powell said in a CBS interview, recorded on Wednesday.

Reuters