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Oil approaches $84 as lifting of US travel ban boosts demand

By Alex Lawler

Topics
Crude Oil Price | crude oil production | air travel

Reuters  |  LONDON 

oil prices

By Alex Lawler

LONDON (Reuters) -Oil rose towards $84 a barrel on Tuesday, gaining for a third session, as the U.S. lifting of travel restrictions and more signs of a global post-pandemic recovery lifted the demand outlook, while supply remained tight.

On Monday, travellers took off for the again, while the passing of U.S. President Joe Biden's infrastructure bill and better-than-expected Chinese exports helped paint a picture of a recovering global economy.

Brent crude rose 50 cents, or 0.6%, to $83.93 a barrel by 0920 GMT, after gaining 0.8% on Monday. U.S. oil advanced 41 cents, or 0.5%, to $82.34, also after a 0.8% rise the previous day.

"With the re-opening of U.S. borders for vaccinated travellers, jet fuel demand ought to receive a healthy ... boost," said Tamas Varga of oil broker PVM.

"The passage of the $1 trillion U.S. infrastructure bill in Congress is also expected to provide additional help."

The price of Brent has risen over 60% this year and hit $86.70, a three-year high, on Oct. 25, supported by supply restraint by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and recovering demand.

At a meeting last week, OPEC+ decided to stick to its existing pace of easing of record output cuts and rebuff U.S. pleas to pump more - helping to keep supply tight for the near term in the view of some analysts.

JPMorgan Chase said global demand for oil in November was already nearly back to pre-pandemic levels of 100 million barrels per day (bpd), following last year's collapse.

Biden, however, may take measures as early as this week to address soaring gasoline prices, U.S. Energy Secretary Jennifer Granholm said on Monday.

Despite a tight global market, U.S. crude inventories are expected to have risen for a third straight week, possibly helping to cap further gains in prices. [EIA/S]

The first of this week's two supply reports, from industry group the American Petroleum Institute, is due at 2030 GMT.

(Additional reporting by Aaron Sheldrick; Editing by Susan Fenton)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, November 09 2021. 15:53 IST
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