Crude oil futures settled sharply higher on Tuesday, recovering well from recent losses, as data showing a surge in fuel demand in India in the month of July pushed up prices.
Traders are also hopeful that energy demand in the U.S. and Europe will rise significantly in coming weeks.
The U.S. Energy Information Administration (EIA) said in a monthly forecast that gasoline consumption in the country is expected to average 8.8 million barrels per day (bpd) in 2021, up from 8 million bpd in 2020, and the trend of rising employment and mobility is expected to continue into next year, and lead to gasoline consumption averaging almost 9 million bpd in 2022.
Oil also found support after the U.S. Senate today passed a bipartisan $1.2 trillion infrastructure package. The bill will now proceed to the House of Representatives.
West Texas Intermediate Crude oil futures for September ended up by $1.81 or 2.7% at $68.29 a barrel.
Brent crude futures were up $1.82 or 2.6% at $70.86 a barrel a little while ago.
In India, fuel consumption, a proxy for oil demand, totaled 16.83 million tons, up 2.9% from June and 7.9% from the same period a year ago as most restrictions were eased, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed on Monday.
Investors now await weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration. The API’s report is due later today, while the data from EIA will be out Wednesday morning.