Oil reaches $84 as lifting of U.S. travel ban boosts demand

Oil rose to around $84 a barrel on Tuesday, gaining for a third session, as the U.S. lifting of travel restrictions and more signs of a global post-pandemic recovery boosted the demand outlook, while supply remained tight

On Monday, travellers took off for the United States again, while the passing of U.S. President Joe Biden’s infrastructure bill and better-than-expected Chinese exports helped paint a picture of a recovering global economy

Brent crude was up 62 cents, or 0.7%, to $84.05 a barrel, after gaining 0.8% on Monday. U.S. oil advanced 82 cents, or 1%, to $82.75, also after a 0.8% rise the previous day

“With the re-opening of U.S. borders for vaccinated travellers, jet fuel demand ought to receive a healthy … boost,” said Tamas Varga of oil broker PVM

“The passage of the $1 trillion U.S. infrastructure bill in Congress is also expected to provide additional help

The price of Brent has risen over 60% this year and hit $86.70, a three-year high, on Oct. 25, supported by supply restraint by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and recovering demand

At a meeting last week, OPEC+ decided to stick to its existing pace of easing record output cuts and rebuff U.S. pleas to pump more – helping to keep supply tight for the near term in the view of some analysts

JPMorgan Chase said global demand for oil in November was already nearly back to pre-pandemic levels of 100 million barrels per day (bpd), following last year’s collapse

Biden, however, may take measures as early as this week to address soaring gasoline prices, U.S. Energy Secretary Jennifer Granholm said on Monday

Despite a tight global market, U.S. crude inventories are expected to have risen for a third straight week, possibly helping to cap further gains in prices