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Crude oil imports into Europe surged by close to 1 million bpd last month, Bloomberg reports, citing a sharp rise in Brent crude prices.
Nigeria, the United States, and Brazil were among the exporters that benefited from the price trend caused by maintenance at several large producing fields in the North Sea and a recovery, albeit weak, in oil demand on the continent.
“The arbitrage to Europe has opened up, and that should encourage higher inflows particularly from the U.S. and perhaps also Nigeria whilst Indian demand remains in doubt,” consultancy FGE’s head of short-term market research James Davis said, as quoted by Bloomberg.
“The increasing demand from Europe could be tied to anticipation of easing up on lockdowns in the months to come,” according to Emmanuel Belostrino, an analyst at Kpler, as quoted by Bloomberg.
Oil prices recorded two consecutive weeks of gains despite the surge in Covid-19 cases in India, which is among the world’s top importers of oil. While cases in India rose by six figures every day, Europe and the United States began to reopen more actively thanks to vaccinations, which spurred optimism for demand.
More and more U.S. states are reopening for business. In Europe, the EU has stated it plans to start allowing foreign tourists into the bloc as of June in a bid to avoid another destroyed summer season for its tourism industry.
“The euphoria over an accelerating US economy and summer reopening plans across the European Union remains in the driver’s seat for the oil complex,” Vanda Insights said in a market commentary on Friday.
It appears that even the Friday jobs report from the U.S. Labor Department, which revealed a much weaker recovery in hiring than expected, could not affect prices negatively despite the fact it suggested the recovery in employment may take longer than anticipated.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.