(C) Reuters. FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base
By Noah Browning
LONDON (Reuters) -Oil prices rose on Tuesday, with Brent hitting $71 and trading at its highest since March, on expectations for growing fuel demand during the summer driving season in the United States.
Prices were also boosted by Chinese data showing that the country’s factory activity grew at its fastest this year in May.
Brent crude futures for August gained $1.48, or 2.1%, to $70.80 a barrel by 1110 GMT. U.S. West Texas Intermediate crude for July was at $68.19. That was up $1.87, or 2.8%, from Friday’s close, with no settlement price for Monday because of a U.S. public holiday.
Brent earlier hit a session peak of $71, the highest intra-day price since March 8.
“While there are concerns over tighter COVID-19 related restrictions across parts of Asia, the market appears to be more focused on the positive demand story from the U.S. and parts of Europe,” ING Economics analysts said in a note on Tuesday.
Tracking business GasBuddy said Sunday’s U.S. gasoline demand, coinciding with the Memorial Day weekend, jumped 9.6% above the average of the previous four Sundays. That was the highest Sunday demand since the summer of 2019.
The price gains were capped, thoughby expectations that more output will hit the market.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are likely to agree to continue a slow easing of supply curbs when they meet on Tuesday, OPEC sources said, as producers balance an expected demand recovery against a possible increase in Iranian output.
“There are no signs of division within the group and we expect it to hold on to a steady course with very good control of the market,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, anticipating rising global demand despite the very high number of coronavirus cases in India, the world’s third-largest oil consumer.
Brent hits highest since March on demand prospects
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