By Gina Lee
Investing.com – Oil inched up Tuesday morning in Asia as investors remained optimistic the continued economic recovery in regions such as Europe and the U.S. will boost fuel demand. However, ever-increasing numbers of COVID-19 cases in other regions put a cap on the black liquid’s gains.
Brent oil futures inched up 0.03% to $67.58 by 11:25 PM ET (3:25 AM GMT) and WTI futures inched up 0.02% to $64.50.
The European Union plans to ease curbs for the upcoming peak summer travel season, while states around the New York region in the U.S. will lift most of the COVID-19 capacity restrictions on businesses.
Oil has jumped in 2021 as investors bet that the COVID-19 vaccinations would help it return to pre-COVID-19 levels. U.S. Federal Reserve Chair Jerome Powell also said on Monday that the U.S. economic recovery is “making real progress," but warned that the road towards economic recovery remains long.
On the supply front, the Organization of Petroleum Exporting Countries and allies (OPEC+) will be cheered by the market’s strength so far in May as it eases production cuts. Iraq, the cartel’s second-biggest producer, forecasts the fuel price to remain around $65 a barrel in the coming months.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.
In Asia, however, the ever-surging number of COVID-19 cases continues to cast a shadow over the market. The number of cases in India, the third-largest oil importer globally, topped 19.9 million as of May 4, according to Johns Hopkins University data.
Elsewhere in Asia, countries including Japan, Thailand, Laos, Nepal and Bhutan have reported significantly rising numbers of COVID-19 cases over the past few weeks.
However, investors continue to remain optimistic overall.
“India’s demand is seen pretty weak now, which is a big issue, but the market seems to have moved past that. A lot of that has to do with the vaccination programs, and U.S. and Europe reopening,” Oanda Asia Pacific senior market analyst Jeffrey Halley.