Oil prices steady on optimism over U.S, European reopenings 

Oil prices steady on optimism over U.S, European reopenings

Oil prices rose more than 1% on Monday, as European economic reopenings offset gloom from surging Covid-19 cases in Asia, fresh restrictions and underwhelming Chinese manufacturing data. 

Brent crude edged 75 cents or 11% to end the session at $69.46 a barrel and West Texas Intermediate (WTI) crude settled 90 cents, or 1.4%, higher at $66.27.

The British economy reopened after a four-month COVID-19 lockdown. Covid-related restrictions have been relaxed within France and Spain amid accelerating vaccination rates, while Portugal and the Netherlands have eased travel restrictions.

United Airlines is revitalizing its route network with more destinations and announced that it would add 400 daily flights to its July schedule for European destinations.

Investors remained worried about the coronavirus variant first detected in India. Some Indian states said on Sunday they would extend lockdowns to fight the pandemic, which has killed more than 270,000 people there.

Domestic sales of gasoline and diesel by Indian state refiners plunged by a fifth in the first half of May from a month earlier amid a staggering spike in covid cases to record highs in India. 

China’s factories slowed their output growth in April and retail sales significantly missed expectations as officials warned of new problems affecting the recovery in the world’s second-largest economy.

China’s crude oil throughput rose 7.5% in April from the same month a year ago, but remained off the peak seen in the last quarter of 2020.

Signs of rising supply also capped oil’s gains.

U.S. oil output from seven major shale formations is expected to climb by 26,000 barrels per day (bpd) in June to 7.73 million bpd, the first rise in three months, the U.S. Energy Information Administration said in a monthly forecast.

Damon Harrison
Market Analyst, IPG Group