Crude oil futures settled notably higher on Tuesday after positive news on the coronavirus vaccine front raised hopes that the demand for oil will see a steady increase in the coming months.
According to reports, Dr. Anthony Fauci, the U.S.’ top infectious disease expert, has said both the Pfizer and AstraZeneca Covid vaccines are effective against the Delta variant post two doses.
Many countries including the U.S. are looking to gradually ease travel restrictions.
However, a report from the U.S. Energy Information Administration (EIA) that showed the agency has cut its 2021 world oil demand growth forecast by 10,000 barrels per day to 5.41 million bpd, limited oil’s uptick.
In its monthly forecast, the agency cut its oil demand growth estimate for 2022 by 90,000 bpd to 3.64 million bpd.
Traders also continued to weigh the prospects of Iranian oil coming into the market. Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports.
West Texas Intermediate Crude oil futures for July ended up by $0.82 or about 1.2% at $70.05 a barrel, the highest settlement since October 2018.
Brent crude futures moved up $0.82 or 1.16% to $72.31 a barrel.
Traders now look ahead to weekly inventory data from the American Petroleum Institute (API) and the EIA. While API’s report is due later today, the EIA will release its inventory data Wednesday morning.