Oil prices rose to the highest level in seven weeks early on Tuesday, as the market continues to believe that the economic and oil demand rebound in the United States and Europe will outweigh the still tragic COVID numbers in India and Brazil.
As of 8:51 a.m. EDT on Tuesday, the U.S. benchmark WTI Crude was back above $65 per barrel, having touched the highest level since March earlier in the day. WTI Crude prices were up 1.29 percent at $65.27, while the international benchmark Brent Crude was up 1.32 percent on the day at $68.40.
The oil complex was also supported on Tuesday by a weaker U.S. dollar, which fell after Monday data showed that U.S. manufacturing activity grew in April at a slower pace than expected.
The central theme in the oil market, however, was the expected economic and oil demand recovery as more U.S. states are easing restrictions toward full reopening and the European Union is proposing to welcome vaccinated tourists this summer.
Starting mid-May, New York, New Jersey, and Connecticut will remove the majority of the capacity restrictions for restaurants and offices. They also have plans to increase the limit on outdoor social gatherings in a significant easing of restrictions on the region's businesses, venues, and gatherings "given significant progress in vaccinations and sustained reduction in COVID-19 cases and hospitalizations," the governors of the three states said.
In Europe, the EU also gave oil bulls hope this week, unveiling on Monday a plan to open its borders to vaccinated tourists. The European Commission proposes that the EU allow entry for non-essential travel for anyone who has received the last dose of an EU-approved vaccine at least two weeks before arrival.
"Crude prices were extending Monday's moderate gains early Tuesday in Asia under the positive momentum of a steadily improving economic picture in the US and the Eurozone," Vanda Insights said in a daily commentary on Tuesday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More