Crude oil prices rose on Tuesday, with Brent hitting $75 a barrel for the first time since April 2019, as investors remained bullish about a quick recovery in global oil demand and as concerns eased over an early return of Iranian crude.
Brent crude futures for August climbed 29 cents, or 0.4%, to $75.19 a barrel by 0658 GMT, paring earlier losses. It rose as high as $75.27 a barrel, the strongest since April 25, 2019, earlier in the session.
U.S. West Texas Intermediate (WTI) crude for July was at $73.66 a barrel, unchanged from the previous session. WTI for August climbed 13 cents, or 0.2%, to $73.25 a barrel.
Brent gained 1.9% and WTI jumped 2.8% on Monday.
Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel.
“The market sentiment stays strong with improved outlook for global demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that a rally in Asian stock markets is also helping boost risk appetite among investors.
Global shares on Tuesday extended their recovery from four week lows as investors focused on prospects for post-pandemic economic growth, rather than fret more over the hawkish stance taken by the U.S. Federal Reserve at a policy meeting last week.
BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.
Iran’s President elect Ebrahim Raisi on Monday backed talks between Iran and six world powers to revive a 2015 nuclear deal but flatly rejected meeting U.S. President Joe Biden, even if Washington removed all sanctions.
The lower probability of Iranian crude oil returning to the market due to the new hardline president is also supporting the market.
Meanwhile, China has issued 35.24 million tons of crude oil import quotas to non-state refiners in a second batch of allowances for 2021, a 35% drop from the same slot last year, according to a document seen by Reuters and two sources with knowledge of the matter.