Brent oil edged toward $70 a barrel with optimism building about the demand outlook in key regions such as the U.S., even as the coronavirus makes a comeback in parts of Asia.
Futures in London climbed for a third session, while New York crude rose from the highest settlement in two years.
The largest number of passengers passed through U.S. airports since the pandemic began, a sign of the domestic travel revival that’s boosting fuel consumption.
The rebound in America along with China and Europe is offsetting concerns around weaker consumption in India.
Oil is up almost 35% this year amid optimism fuel demand will increase as the vaccination drive accelerates across major economies and boosts mobility.
The devastating resurgence in India and new outbreaks in regions that had largely contained the virus such as Taiwan, however, are a reminder that the recovery is going to be uneven and bumpy.
“The market is clearly focused on U.S., Europe and China,” said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific. Brent could climb to $72 a barrel quite quickly once it gets through strong resistance at $70, he added.
Brent for July settlement gained 0.4% to $69.72 on the ICE Futures Europe exchange at 6:30 a.m. London time after climbing 1.1% in the previous session.
West Texas Intermediate for June added 0.4% to $66.52 a barrel on the New York Mercantile Exchange after rising 1.4% on Monday.
The prompt timespread for Brent was 32 cents a barrel in backwardation — a bullish structure were near-dated contracts are more expensive than later-dated ones. That compares with 18 cents a week earlier.
Passengers checking in through security at U.S. airports surged to 1.85 million on Sunday, the highest since early March 2020, according to Transportation Security Administration data. The flurry of travelers making their way through terminals has steadily climbed for the past month and is now only about 30% lower than levels the TSA saw at the same time in 2019.
A weaker U.S. dollar is also boosting the appeal of commodities such as oil priced in the currency. The Bloomberg dollar spot index was lower for a fourth session.