SINGAPORE: Oil prices edged up in early Asian trade after a 1% dip in the previous session, as global economic recovery and easing travel curbs in the United States and Europe buoyed the fuel demand outlook while the surging pandemic in India capped prices.
Brent crude futures for July were at $68.17 a barrel by 0052 GMT, up 8 cents, while U.S. West Texas Intermediate (WTI) crude for June rose 9 cents to $64.80.
Both Brent and WTI are on track for a second weekly gain as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand, while pent-up summer travel is likely to give gasoline and jet fuel consumption a further boost.
In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery had entered a new phase amid a booming economy.
However, oil demand recovery has been uneven as surging COVID-19 cases in India has reduced fuel consumption at the world’s third-largest oil importer and consumer.
Resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of that lost demand has been offset by countries such as China where recent Labour Day holiday travel surpassed 2019 levels.
“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.
“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”