Oil Rises On Vaccination Success In U.S., UK, And More Saudi Attacks

The IMF meanwhile predicts upward growth for Middle East and North Africa: File Image/Pixabay

 

Apparently weary of fretting over the slow Covid vaccination rate in Europe, crude traders on Monday took solace that inoculations have reached 22 percent of the total U.S. population and 11 percent in the United Kingdom–and as a result, oil prices rose, albeit modestly.

Oil was also supported by Yemen’s Iran-aligned Houthi movement firing 17 drones and two ballistic missiles at Saudi Arabia targets, including towards Saudi Aramco refineries in Jubail and Jeddah.

Brent on Monday rose 33 cents to settle at $63.28 per barrel, while West Texas Intermediate rose 38 cents to settle at $59.70 per barrel.

U.S. Federal Reserve Chair Jerome Powell said the economy is at an “inflection point” amid expectations that growth and hiring will accelerate in the months ahead, but it faces the risk of reopening too quickly and sparking a resurgence in Covid cases.

Still, the U.S. recovery continues to defy analytical expectations, and on Monday the Energy Information Administration said output from seven major shale formations is expected to rise for a third straight month, climbing by about 13,000 barrels per day (bpd) in May to 7.61 million bpd.

The biggest increase is set to come from the Permian, where output is expected to rise by 52,000 bpd to about 4.47 million bpd, the highest since April 2020.

Bob Iaccino, a trader at CME Group, pointed out on Monday that after falling as much as 30 percent during the government Covid lockdowns, global oil demand is now back to about 95 percent of its pre-pandemic highs, with global consumption of gasoline, diesel and jet fuel are at their highest in more than a year.

However, he added that Europe still struggling with the pandemic and tensions with China mean the recovery of U.S. exports may take longer.

Indeed, Europe seems to be the only gloomy note in a remarkable emerging recovery story: the International Monetary Fund revised its growth forecast upward for the Middle East and North Africa region, as countries recover from the coronavirus crisis: real GDP in the MENA region is now expected to grow 4 percent this year, up from the fund’s October projection of 3.2 percent.

Jihad Azour, director of the IMF’s Middle East and Central Asia department, said, ″(The) vaccine is an important variable this year, and the acceleration of vaccination could contribute to almost one additional percent of GDP in 2022.”