Oil futures rose Tuesday, with the global benchmark, Brent crude, briefly pushing above the $70-a-barrel threshold for the first time since mid-March, as traders focus on reopening activity in the U.S. and Europe.
West Texas Intermediate crude for June delivery was up 33 cents, or 0.5%, at $66.60 a barrel on the New York Mercantile Exchange. July Brent crude was up 44 cents, or 0.6%, at $69.90 a barrel after trading at a session high of $70.24. A most-actively traded Brent contract last traded above $70 on March 15, according to FactSet.
Analysts said optimism over the further loosening of restrictions on activity in Western countries, including the U.S. and U.K. were driving the market.
“The oil market has been in a tug of war over Western reopening optimism and rising COVID cases in Asia. With prices trading at almost two-year highs, it would appear the glass is half full in the oil markets right now,” said Sophie Griffiths, analyst at Oanda, in a note.
Optimism was reinforced by travel numbers, with U.S. airports seeing the highest number of passengers since the beginning of the pandemic, she said, with easing restrictions in Europe likely to allow travel to increase in coming weeks
However, COVID cases in India and Japan remain a risk to demand, Griffiths said, with India’s domestic sales of fuel and gasoline by state refiners down 20%.