Crude prices have remained subdued over the past three weeks, as rising expectations of a booming US economy were offset by the slow pace of vaccination in Europe and the anticipation of additional supply from Iran in the coming months.
Brent rose $ 1.01, or 1.6%, to $ 63.96 a barrel at 10:49 a.m. EDT (1449 GMT). U.S. West Texas Intermediate (WTI) rose $ 1.10, or 1.9%, to $ 60.42 a barrel.
The United States has fully vaccinated 22% of its population, while the UK has vaccinated 11% fully, according to Reuters vaccine tracking. Yet other countries are not doing as well, with France and Germany at around 6% vaccinated.
“Oil prices have risen today due to the progress of vaccination campaigns in the United States, which are contributing to the country’s spending plan,” said Louise Dickson, oil markets analyst at Rystad Energy. “The upward momentum in other countries is promising, but large gaps remain globally.”
Prices also found some support after the Iranian-aligned Houthi movement in Yemen said it had fired 17 drones and two ballistic missiles at Saudi targets, including at Saudi Aramco refineries in Jubail and Jeddah.
There was no immediate Saudi confirmation. Saudi Aramco, the state oil company, made no comment when contacted by Reuters.
“While there are still many reasons for optimism, market participants have become more cautious as infections have increased in Europe, India and some emerging markets, while vaccine deployments have proven to be more slower than expected, “said Stephen Brennock, PVM oil broker.
India now accounts for one in six daily coronavirus infections globally, with cases increasing in other parts of Asia as well.
Asian oil demand remained weak and some buyers requested lower volumes in May, in part due to refinery maintenance and higher prices.
The US economy is at an “inflection point” as growth and hiring are expected to accelerate in the coming months, but it risks reopening too quickly and causing a resurgence coronavirus cases, Federal Reserve Chairman Jerome Powell said in an interview on Sunday.