Oil prices rose on expectations of a fuel demand recovery

Oil prices increased on April 23 in hopes of a fuel demand rebound in the United States and Europe. The expectation of recovery increases as economic growth picks up and lockdowns ease. However, worries about India’s raging second wave of coronavirus infections kept a lid on gains.

Brent crude futures increased by 0.3%, which equals 21 cents, and settled at $65.61 a barrel. Significantly, in the previous session, Brent crude boosted by 8 cents.

U.S. West Texas Intermediate crude futures surged 0.5% or 29 cents and traded at $61.72 a barrel. On Thursday, WTI crude futures rose by 8 cents.

According to ANZ analysts, the market shrugged off last week’s U.S. oil inventory build, comforted by the continued growth in gasoline demand.

Valero, a U.S. refiner, reported gasoline and diesel demand were back to 93% and 100% of the levels they were at before the epidemic hit.

Improving conditions in Europe also buoyed sentiment. France announced schools would reopen on Monday. The domestic travel curbs restricting people within 10 km of their homes will end May third.

benchmark crude contracts are headed for a weekly loss of approximately 2%

Furthermore, both benchmark crude contracts are in for a weekly loss of approximately 2% on concerns about sliding fuel demand in India, the world’s third-largest oil importer. As we know, in India, daily infections and deaths from coronavirus hit new records this week.

Several countries, such as Australia, the United Kingdom, Canada, and the United Arab Emirates, have barred or cut flights from India.

Remarkably, diesel and gasoline consumption may decrease by 20% during April. However, oil remains over 25% higher in 2021, aided by the roll-out of coronavirus vaccines and vigilant supply management from the OPEC+. However, the bulk of crude’s advance came in the first two months of the year, and rates have struggled since. OPEC+ is expected to start easing deep supply curbs from May.