Crude oil prices rose sharply on Tuesday and lifted the most active oil futures contracts to their highest settlement in over two and a half years.
Oil prices rose amid optimism about a strong global economic recovery and increased demand for oil as the U.S. and Europe relax restrictions and reopen businesses following a drop in fresh coronavirus cases and an acceleration in the vaccination drive.
Oil prices were buoyed by news that the Organization of the Petroleum Exporting Countries (OPEC) and their allies have agreed to continue a slow easing of supply curbs.
West Texas Intermediate Crude oil futures for July ended up by $1.40 or about 2.1% at $67.72 a barrel, the highest close since October 2018.
Brent crude futures gained $1.20 or 1.73% at $70.52 a barrel.
Data from Markit Economics showed that the IHS Markit U.S. manufacturing index in May was at 62.1 versus an initial 61.5.
Manufacturing activity in the U.S. expanded at a slightly faster pace in the month of May, according to a report released by the Institute for Supply Management.
The ISM said its manufacturing PMI inched up to 61.2 in May from 60.7 in April, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to come in unchanged.
Surveys showed earlier in the day that factory activity continued to expand in key Asian economies in May, thanks to an ongoing recovery in global demand.
Eurozone manufacturing activity expanded at a record pace in May despite supple bottlenecks, a separate survey showed.
IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) rose to a new record high of 63.1 in May from April’s 62.9. This was up from a preliminary 62.8.
Sentiment was also underpinned after the OPEC+ Joint Technical Committee kept its global oil demand forecast steady amid a robust recovery in the U.S. and Europe and reinforced the view that the market was well-placed to absorb more supply from Iran.
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