EnergyWatch

Oil extends two-day gain on strong fuel demand signals

Several signs of rising fuel demand, including traffic congestion in 15 big European cities hitting the highest level since the pandemic began, have oil trading higher.

Photo: Jan Unger

Oil prices jump Wednesday for the second day in a row after strong signs of fuel demand appearing in Western economies.

Meanwhile, the prospect of Iranian crude flooding the market falters after US Secretary of State Antony Blinken said sanctions against Tehran will probably not be removed, reports Reuters.

"Improved demand outlook appears to be bolstering crude oil prices, as the successful vaccine rollouts and summer driving season in the United States and Europe continues to support fuel demand," says Margaret Yang, strategist at Singapore-based DailyFX.

Fresh traffic data indicate a surge in road travel now that restrictions have been eased, write ANZ analysts in note cited by the news agency, referencing Tomtom data showing that traffic congestion in 15 big European cities has hit the highest level since the Covid-19 pandemic began.

Tuesday, the US Energy Information Administration forecasts growth in domestic fuel consumption to 1.49 million barrels per day compared to an earlier prognosis slating 1.39 mbpd.

One barrel of European reference oil Brent trades Wednesday morning for USD 72.56 against USD 71.63 Tuesday afternoon. US counterpart West Texas Intermediate sells concurrently for USD 70.42 compared to USD 69.66.

English Edit: Daniel Frank Christensen

Increased concern over global recovery threatens oil prices 

Sluggish vaccine programs curb oil optimism 

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