Oil prices rose on Tuesday after President Biden lifts the pandemic travel ban imposed on U.S bound travelers for more than a year. The lifting of travel restrictions bolstered crude oil outlook as it indicates global post-pandemic recovery even with the current tight global oil supply.
Brent crude oil, against which Nigerian oil is priced, rose by 31 cents or 0.4 percent to $83.74 per barrel at 1:51 pm Nigerian time. U.S West Texas Intermediate Oil appreciated by 36 cents or 0.4 percent to $82.29 per barrel after posting a 0.8 percent gain 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.”
Brent crude oil has risen by over 60 percent this year alone and rose to as high as $86.70 per barrel on October 25. Broad-based supply constraints supported by OPEC and allies’ (OPEC+) decision to gradually increase oil supply instead of pumping to match global demand has helped boost global oil prices to a three-year high in recent months.
Also, the reopening of global economies amid better than expected Chinese exports data released on Monday painted a picture demand will continue to grow into the first half of 2022.
Last week, JPMorgan Chase said global oil demand was already back to pre-pandemic levels of 100 million barrels per day (bpd) even without full global recovery.
With the lifting of the travel ban for non-U.S citizens, oil demand would surge with an increase in the demand for jet fuel.
“It’s a day that we wished would come sooner but after 604 days of not being able to travel to the U.S. we’re delighted to be back,” said British Airways CEO Sean Doyle, who was on the carrier’s first flight to the U.S. after the restrictions lifted Monday.