On Wednesday, oil prices increased for a second day on evidence of strong gasoline demand in western countries, while the chance of Iranian supplies returning diminished as US Secretary of State John Kerry warned sanctions against Iran were unlikely to be relaxed.
Brent crude futures were up 37 cents, or 0.5 percent, at $72.59 a barrel at 0520 GMT, having previously reached $72.83, the highest level since May 20, 2019. On Tuesday, Brent increased by 1%.
WTI oil futures in the US climbed 39 cents, or 0.5 percent, to $70.44 a barrel after hitting a high of $70.62, the most since Oct. 17, 2018. WTI prices jumped by 1.2 percent on Tuesday.
“Demand has increased. The successful vaccination rollouts and summer driving season in the United States and Europe seems to be supporting crude oil prices, according to the prognosis “Margaret Yang, a strategist at DailyFX in Singapore, agreed.
Recent traffic data suggests travellers are hitting the roads as restrictions ease, ANZ Research analysts said in a note, pointing to TomTom data which showed traffic congestion in 15 European cities had hit its highest since the coronavirus pandemic began.
On Tuesday, the U.S. Energy Information Administration forecast fuel consumption growth this year in the United States, the world’s biggest oil user, would be 1.49 million barrels per day (bpd), up from a previous forecast of 1.39 million bpd.
In another positive sign, industry data showed U.S. crude oil inventories fell last week, in line with analysts’ expectations, according to a Reuters poll.
Crude stocks declined by 2.1 million barrels in the week ending June 4, according to the American Petroleum Institute, according to two market sources who cited the data.
The US Energy Information Administration will release stockpile data on Wednesday at 1430 GMT.
Oil investors had been thinking that sanctions against Iranian exports would be lifted and oil supplies would grow this year as Iran’s discussions with western powers on a nuclear deal continued, so price gains had been restricted in recent weeks.
On Tuesday, however, US Secretary of State Antony Blinken stated that even if Iran and the US restored to compliance with the nuclear deal, hundreds of US sanctions against Tehran would remain in place.