By Peter Nurse
Investing.com — Oil prices powered ahead Tuesday, climbing for the sixth consecutive session, boosted by a tight supply outlook while demand picks up as Covid-19 restrictions are lifted.
By 9:45 AM ET (1345 GMT), futures were up 1.1% at $76.28 a barrel, hitting its highest since July, after jumping 2% the previous day. Futures rose 1% to $79.50 per barrel on Monday, after rising 1.8% on Monday.
U.S. The U.S. Gasoline RBOB Futures rose 1.1% to $2.1925 a gallon.
The rise in crude oil demand comes as more countries relax their mobility restrictions. Japan declared that it would lift the prefecture state of emergency to address a drop in Covid-19 case numbers. Australian authorities also announced plans for gradual reopening Sydney Locked-down, which is the nation’s largest city.
Additionally, German airline Lufthansa said demand for had more than tripled in the week since the U.S. relaxed its conditions on arrivals from Europe.
Tightening global supplies have fueled the majority of recent gains. In August and September Hurricanes Ida, Nicholas, which severely damaged platforms, pipelines, processing centers, and other infrastructure in the U.S. Gulf of Mexico, shut down most offshore production for several weeks.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies were cautious about how much they increase output in order to recover from the severe pandemic.
“While the scale of the deficit for the remainder of this year means that the market can absorb more than the currently planned 400,000 bbls/d increase per month, the group will want to ensure that the market continues to draw inventories. This is particularly the case given that in 2022, the oil market is expected to be much more balanced,” said analysts at ING, in a note.
These high oil prices will likely continue for some time.
Barclays (LON:) raised its 2022 Brent and WTI price forecasts to $77 and $74 a barrel, respectively, while Morgan Stanley (NYSE:) sees Brent trading at $77.5 a barrel in the third quarter under a base case and at $85 in a bull case.
Last week Goldman Sachs (NYSE:) said oil could surge to $90 a barrel, $10 higher than the bank’s current forecast, if the approaching winter in the northern hemisphere proves colder than normal.
Investors are now awaiting U.S. crude-oil supply data from the, which is due to be released later today.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.