A survey shows that Americans are becoming more and more accustomed to meeting friends, returning to the office and participating in large-scale events.
Oil prices remained near multi-year highs on Monday, thanks to improved demand prospects, as the increase in COVID-19 vaccination helped lift travel restrictions.
As of 01:23 GMT, Brent crude oil rose 14 cents, or 0.2%, to $72.83. It rose 1.1% last week and hit its highest point since May 2019 at $73.09 on Friday.
US West Texas Intermediate crude oil also rose 14 cents, or 0.2%, to US$71.05 per barrel. Last Friday it reached US$71.24, the highest since October 2018, and is up 1.9% this week.
According to a survey by CBS News, Americans are increasingly willing to meet with friends, return to work, and participate in large-scale events, because the number of daily air passengers in the United States has exceeded 2 million for the first time since the pandemic began.
Vehicle traffic in most parts of North America and Europe is returning to pre-pandemic levels. With the relaxation of blockades and other restrictions, more aircraft are flying in the air, pushing the benchmark oil price up for three weeks.
Turn on the faucet
The International Energy Agency (IEA) stated in its monthly report on Friday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies OPEC+ need to increase production to meet the recovery needs.
After the pandemic eliminated demand in 2020, OPEC+ has been restricting production to support prices.
“OPEC+ needs to open the tap to maintain adequate supply in the world oil market,” the International Energy Agency said.
Goldman Sachs said last week that with the launch of vaccination to boost global economic activity, Brent crude oil is expected to rise to US$80 per barrel in the middle of the year.
Energy services company Baker Hughes stated in its weekly report that the number of oil rigs in the United States increased by 6 to 365, the highest level since April 2020.
This is the largest weekly increase for oil rigs in a month, as drilling companies seek to benefit from increasing demand.
Vanda Insights founder Vandana Hari said that with the reopening of the United States and Europe, crude oil has digested many incremental and bullish news in the past week. Hari said that prices may rise in the next few weeks, but “at a more gradual pace” the market is waiting for new momentum.
Traders are also tracking Iran’s negotiations with world powers to restart the nuclear agreement in Vienna this week, which may allow the United States to lift sanctions on crude oil exports from that country. Iranian Deputy Foreign Minister Abbas Araghci expressed doubts about the possibility of resuming the agreement before the citizens elect a new president on June 18. Hard-line clergyman Ibrahim Raisi said that if elected, he will continue negotiations, but he will not regard them as major national concerns.
According to weekly data from the Commodity Futures Trading Commission, traders are still optimistic about the room for further gains. Fund managers have raised their bets on WTI to their most bullish level in about three years.