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Oil rose 1% as demand recovers in the two biggest economies

Oil increased by more than 1% as Chinese economic figures and U.S. vaccination rates pointed to a strong recovery in demand in the world’s two biggest economies.

Still, investors remain cautious over increasing infection rates in India, the third-biggest fuel importer worldwide, along with a higher OPEC+ oil supply.

Brent crude surged by 1.2%, which equals 80 cents, and traded at $67.56 a barrel. Meanwhile, U.S. West Texas Intermediate gained 91 cents, or 1.4%, and hit $64.49 a barrel.

America and China, the world’s largest two oil consumers, are likely to drive a recovery in demand from the COVID-19 pandemic.

According to the BofA Global Research report, even as coronavirus cases hit record levels this week, oil prices have boosted on growing vaccination numbers in developed markets.

Moreover, Reuters’ COVID-19 tracker revealed that about a third of U.S. residents have been fully vaccinated.

Meanwhile, Chinese crude imports averaged a seasonal record in February and March from boosted car sales, a recovery in local travel, and a strong industrial backdrop.

India on Monday reported over 300,000 new virus cases

However, parts of the world such as India are facing increasing COVID-19 infections. India on Monday reported over 300,000 new virus cases for a 12th straight day. The new wave of the COVID-19 has already led to a decline in fuel sales in April.

Brent has boosted about 30% in 2021, rebounding from last year’s historic lows thanks to record supply cuts by OPEC+.

Still, OPEC+ decided last week to stick to a plan to increase supply slightly from May 1, and OPEC’s production rose in April, led by an increase from Iran.

Tehran and world powers are renewing talks to revive the 2015 nuclear deal that could add to global oil supplies should an agreement be reached. On Saturday, Iran’s chief nuclear negotiator announced that Tehran anticipates U.S. sanctions on oil, banks, and most individuals and institutions to be raised.

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