Oil rose towards US$84 a barrel on Tuesday (9 November), gaining for a third session, as the U.S. lifting of travel restrictions and more signs of a global post-pandemic recovery lifted the demand outlook, while supply remained tight.
On Monday (8 November), travellers took off for the United States again, while the passing of US President Joe Biden’s infrastructure bill and better-than-expected Chinese exports helped paint a picture of a recovering global economy.
Brent crude rose 50 cents, or 0.6%, to US$83.93 a barrel by 0920 GMT, after gaining 0.8% on Monday. US oil advanced 41 cents, or 0.5%, to US$82.34, also after a 0.8% rise the previous day.
“With the re-opening of U.S. borders for vaccinated travellers, jet fuel demand ought to receive a healthy … boost,” said Tamas Varga of oil broker PVM.
“The passage of the US$1 trillion U.S. infrastructure bill in Congress is also expected to provide additional help.”
The price of Brent has risen over 60% this year and hit US$86.70, a three-year high, on 25 October, supported by supply restraint by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and recovering demand.
At a meeting last week, OPEC+ decided to stick to its existing pace of easing of record output cuts and rebuff U.S. pleas to pump more – helping to keep supply tight for the near term in the view of some analysts.
JPMorgan Chase said global demand for oil in November was already nearly back to pre-pandemic levels of 100 million barrels per day (bpd), following last year’s collapse.
Biden, however, may take measures as early as this week to address soaring gasoline prices, U.S. Energy Secretary Jennifer Granholm said on Monday.
Despite a tight global market, U.S. crude inventories are expected to have risen for a third straight week, possibly helping to cap further gains in prices.
The first of this week’s two supply reports, from industry group the American Petroleum Institute, is due at 2030 GMT.
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