Oil futures, buoyed by rising demand in the U.S and Europe, briefly soared above the $70 per barrel threshold, its first time since March 15,during Tuesday’s second trading session.
Brent, the international benchmark, gained 0.88 per cent to $70.07 per barrel. West Texas Intermediate (WTI), which tracks US crude grades, rose 0.80 per cent at $66.80 per barrel.
The rise in crude prices, analysts said, is supported by recovering consumption in countries such as the US and China and the rapid deployment of vaccinations in developed nations as well as the gradual return to normality in the UK which have led to increased optimism about a recovery in energy demand.
Sophie Griffiths, market analyst, at Oanda,UK, noted that reopening optimism in Western economies such as the U.S and U.K is boosting oil prices, triggering oil demand and in contrast to demand worries in parts of Asia where covid cases are still on the rise.
Meanwhile, India, a major crude consumer has seen its demand shrink as a result of rising infections of covid cases. As of Tuesday, the second most populous country recorded a total of 25 million cases.
Similarly, oil consumption has also been threatened in some other Asian countries, particularly Japan and Taiwan as covid-19 countermeasures are on the rise, denting some holes on the global rise in demand for crude oil.