Oil prices rose on Tuesday, with Brent topping $70, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world’s top oil consumer.
Prices were also boosted after data from China showed that factory activity expanded at its fastest this year in May.
Brent crude futures for August gained 83 cents, or 1.2%, to $70.15 a barrel by 0223 GMT. U.S. West Texas Intermediate crude for July was at $67.61 a barrel, up $1.29, or nearly 2% from Friday’s close, with no settlement price for Monday due to a U.S. public holiday.
“While there are concerns over tighter COVID-19 related restrictions across parts of Asia, the market appears to be more focused on the positive demand story from the U.S. and parts of Europe,” analysts from ING Economics said in a note on Tuesday.
“In the U.S., the summer driving season officially got underway following the Memorial Day weekend, and we have entered this period with gasoline inventories already trending lower, and not too far from a 5-year low for this time of the year.”
Tracking firm GasBuddy said Sunday’s U.S. gasoline demand jumped 9.6% above the average of the previous four Sundays, the highest Sunday demand since the summer of 2019.