Oil is continuing to extend gains after closing at a six-week high but the benefits will elude Nigeria where petrol subsidy payments are guzzling up any increase in oil proceeds.
The rising oil price comes as signs of strengthening demand in key markets offset concerns a Covid-19 resurgence in some countries, especially India, will damp consumption in the near term.
Futures in New York traded above $64 a barrel after climbing more than 3% over the previous two sessions.
A gauge of demand for U.S. petroleum products increased last week to the highest in more than two months, while distillate inventories — a category that includes diesel — dropped the most since early March.
Fuel demand may get another boost as China breaks for an extended holiday on Saturday, with mobility expected to climb to a record.
Brent the international benchmark crude grade is trading at $67.89 a barrel Thursday with WTI the US crude grade holding at $64.43.
The market recovery is flowing through to big oil companies. Royal Dutch Shell Plc’s profit rose more than expected in the first quarter, while Total SE also capped a strong start to the year.
Some U.S. producers are also restoring dividends as they rebound from the pandemic-driven crash.
There has been a chorus of bullish voices on the outlook for crude this week, including a prediction from Goldman Sachs Group Inc. that oil demand will post a record jumpover the next six months as vaccination rates accelerate.
OPEC+ also raised its estimates for growth this year, but the alliance cautioned a worsening virus situation in India, Japan and Brazil could derail the recovery.
