Crude Oil Price Breaks $75 Per Barrel Mark

Crude oil prices rose on Tuesday, with Brent hitting $75 a barrel for the first time since April 2019 over emerging signs of a rapidly tightening market.

Brent crude futures for August climbed 29 cents, or 0.4%, to $75.19 a barrel by 0658 GMT, paring earlier losses. It rose as high as $75.27 a barrel, the strongest since April 25, 2019, earlier in the session.

U.S. West Texas Intermediate (WTI) crude for July was at $73.66 a barrel, unchanged from the previous session. WTI for August climbed 13 cents, or 0.2%, to $73.25 a barrel.

Brent gained 1.9% and WTI jumped 2.8% on Monday. Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel.

Also fuelling the bullish market is the Bank of America Corp. forecast that the global crude benchmark could hit the $100 a barrel in 2022, giving credit to a rebound in travel.

However, ongoing COVID-19 outbreaks in several countries are a grim reminder that fuel demand recovery remains uneven. India has had the worst of it, currently experiencing a second wave of covid-19 outbreaks. The spread of the virus is so bad in the region that an outbreak of “Black Fungus” is seen to be on the rise as well.

Another thing investors need to be cautious of is China’s crackdown on its private refiners. The second batch of 2021 crude import quotas allocated to them was about 35% less than 2020, which could impact flows in the sector that accounts for around a quarter of processing capacity in the world’s largest oil importer.