Oil prices rise nearly 2% as travel seen rising

Oil prices rose nearly 2% after more US states eased lockdowns and the EU sought to attract travelers, though soaring COVID-19 cases in India capped gains, Reuters reported.

Futures strengthened in post-settlement trade after American Petroleum Institute estimates of US crude inventories fell more than expected, according to traders.

Brent crude futures settled at $68.88 a barrel, up$1.32, or 1.95 percent, Reuters reported.

The global benchmark continued to rise after the API data was issued, and was trading $1.80 at $69.36 a barrel by 4:40 p.m. ET. (2040 GMT)

US West Texas Intermediate (WTI) crude futures rose by $1.20, or 1.86%, to settle at $65.69 after a 1.4% jump on Monday, Reuters reported.

In post-settlement trade the contract traded up $1.65, or 2.56% at $66.14 a barrel.

“Markets were optimistic coming into the day, boosted by flight movement between US and Europe,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Demand for diesel fuel, including jet, has suffered during the pandemic, weighing down global oil markets.

Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut look to ease pandemic curbs and the EU plans to open up to foreign visitors who have been vaccinated, analysts said.

“Yesterday’s stock market strength is being followed through this morning in the oil market … the market focuses on the successful rollout of vaccine programs in the U.S. and in other developed countries and not on the devastation in India and Brazil.”