Investing.com -- Crude oil prices strengthened Tuesday, surging on optimism that the latest news on reopening in the U.S. and Europe will underpin demand.
By 9:35 AM ET (1435 GMT), U.S. crude futures traded 1.9% higher at $65.68 a barrel, while the international benchmark Brent contract rose 1.9% to $68.86. Both contracts have climbed to levels not seen in over two years.
U.S. Gasoline RBOB Futures were up 2.4% at $2.1519 a gallon.
Helping the tone has been further signs of the developed world reopening their economies as vaccination programs make large inroads into their adult populations.
New York, New Jersey and Connecticut, states that were among the hardest hit by the pandemic, are set to lift most coronavirus-related restrictions on business and social life within two weeks, while Florida lifted all restrictions on Monday.
The European Union has already unveiled plans to relax bans on international travel, while the U.K. is also set to allow international travel from the middle of May.
This is tending to overshadow the health crisis in India as Covid-19 infections and deaths mount in the world’s third-largest oil importer.
“Preliminary data for Indian fuel demand is already available, which shows that gasoline demand fell 6.3% MoM to total 2.14mt, which is the lowest since August,” said analysts at ING, in a note. “Given that it still appears as though Covid-19 in India have not peaked, we expect to see further downside to fuel demand over May.”
Turning to supply, the Organization of Petroleum Exporting Countries pumped an average of 25.27 million barrels a day last month, only 50,000 a day less than in March, according to a Bloomberg survey.
“Given that OPEC+ will start to gradually ease production cuts this month, along with Saudi Arabia gradually easing its additional voluntary cuts, we should see almost 530Mbbls/d of additional supply coming back to the market over May,” ING added.
Of additional interest later in the session will be the U.S. crude oil supply data from the American Petroleum Institute for the week ending April 30.
In corporate news, Saudi Aramco (SE:2222) posted a sharp increase in profit in the first quarter of 2021, although the free cash flow generated by the world’s largest oil company was quite enough to cover its hefty dividend payout.