Brent oil prices were less than 50 cents away from hitting $70 per barrel early on Wednesday amid market optimism that reopening the United States and Europe would accelerate the economies, travel, and oil demand this summer.
As of 9:45 a.m. EDT on Wednesday, ahead of the weekly EIA report on U.S. oil inventories, Brent Crude prices had risen by 1 percent to $69.58.
The U.S. benchmark, WTI Crude, was also up—trading above $66 per barrel, at $66.29, up by 0.94 percent on the day.
Oil prices settled on Tuesday at their highest level in seven weeks, driven by expectations that the economic and oil demand rebound in the United States and Europe would outweigh the still tragic COVID numbers in India and Brazil.
Starting mid-May, New York, New Jersey, and Connecticut will remove the majority of the capacity restrictions for restaurants and offices. In Europe, the European Commission proposes that the European Union (EU) allow entry for non-essential travel for anyone who has received the last dose of an EU-approved vaccine at least two weeks before arrival.
Some of the largest EU economies—including major travel destinations such as Italy—are also gradually reopening, signaling increased domestic travel first and international arrivals later.
Italy will start allowing domestic traveling between regions from mid-May and could welcome EU travelers from mid-June, Italian Prime Minister Mario Draghi said on Tuesday, adding that “Italy is ready to welcome the world again.”
“Optimism around the reopening of economies in Europe, along with the US has proved constructive for the oil market,” ING strategists Warren Patterson and Wenyu Yao said early on Wednesday.