Brent crude oil price hits $75

Brent crude oil price rose on Tuesday, with Brent hitting $75 a barrel for the first time since April 2019, as investors remained bullish about a quick recovery in global oil demand and as concerns eased over an early return of Iranian crude.

Brent crude futures for August climbed 29 cents, or 0.4 percent, 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 prior session. WTI for August climbed 13 cents, or 0.2 percent, to $73.25 a barrel.

Brent gained 1.9 percent and WTI jumped 2.8 percent on Monday.

Both benchmarks have risen for the past a month on optimism on the pace of global COVID-19 vaccinations and expected pick-up in summer travel.

“Industry sentiment stays strong with improved outlook for global demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that the rally in Asian stock markets can also be helping boost risk appetite among investors.

Global shares on Tuesday extended their recovery from four week lows as investors dedicated to prospects for post-pandemic economic growth, as opposed to fret moreover the hawkish stance taken by the U.S. Federal Reserve at a policy meeting last week.

BofA Global Research raised its Brent crude price forecasts for this season and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.

Investors are looking to weekly U.S. inventory data as crude oil stockpiles have fallen for a month, said Toshitaka Tazawa, analyst at commodities broker Fujitomi Co.

U.S. crude stocks were expected to drop for the fifth consecutive week, while distillate and gasoline were seen rising a week ago, a preliminary Reuters poll showed on Monday.

“The oil costs are expected to carry a strong tone amid expectations that fuel demand will pick up quickly along with economic recovery in Europe and the United States,” Tazawa said.

The purchase price gap involving the world's two most actively traded oil contracts narrowed to its lowest in more than seven months, demonstrating that U.S. oil output continues to be in the COVID-19 doldrums with industry likely to remain undersupplied.

Negotiations to revive the Iran nuclear deal took a pause on Sunday after hardline judge Ebrahim Raisi won the country's presidential election.

Raisi on Monday backed talks between Iran and six world powers to revive a 2015 nuclear deal but flatly rejected meeting U.S. President Joe Biden, even though Washington removed all sanctions.

“The lower possibility of Iranian crude oil returning to industry because of the new hardline president can also be supporting industry,” Fujitomi's Tazawa said.

Meanwhile, China has issued 35.24 million tonnes of crude oil import quotas to non-state refiners in another batch of allowances for 2021, a 35 percent drop from the same slot a year ago, according to a file seen by Reuters and two sources with understanding of the matter.