Crude oil price has extended its previous gains as optimism on global oil demand recovery continues to fuel the rally. On Tuesday, WTI futures were down by 0.38% at $66.49. At the same time, the benchmark for global oil – Brent futures, rose by 0.35% at $69.78.
Optimism of demand recovery
The reopening of various European economies has heightened the hopes of returning to the pre-pandemic normalcy; an aspect that has offered support to crude oil price.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Italy, Germany, Denmark, and France are some of the European countries that have eased their coronavirus restrictions. On Monday, the United Kingdom also began its second phase of reopening its economy. Even as it allows for the reopening of indoor drinking and dining establishments, the UK government has called for extreme caution on the virus’ Indian variant.
The recovery of air travel in the US has further fuelled the rallying of crude oil price. On Sunday, the number of passengers who passed through the Transportation Security Administration (TSA) checkpoints stood at 1,850,531. Notably, this is the highest figure since 1st January 2021 when the number was at 2,311,732.
Furthermore, on Monday, United Airlines Holdings Ltd (NASDAQ: UAL) stated that it would add over 400 daily flights to the July schedule. This is a response to the increase in summer travel bookings by 214%, which is more than triple the 2020 levels. The move will have the airline increasing its services to various European destinations. Besides, its US July schedule is expected to hit 80% of the similar period in 2019. Notably, that will be highest figure since the onset of the coronavirus pandemic.
Brent oil technical outlook
At the time of writing, Brent futures were up by 0.35% at $69.78. Earlier in the day, crude oil price had moved past its current resistance level at $69.88 to trade at around $70.10 before pulling back. On a 4-hour chart, it is trading above the 25 and 50-day exponential moving averages.
I expect crude oil price to trade sideways at around $70 as investors await further cues from the US oil inventories data on Wednesday. Better-than-expected figures could fuel the prices to $71. On the other hand, it could drop to $69 if the data misses the analysts’ estimates.