2021.05.0510:24:00UTC+00Oil Nears $70 On Fuel Demand Optimism

Oil prices rose for a third day on Wednesday amid expectations of strong demand as western economies reopen.

Brent crude futures for July settlement rose 92 cents, or 1.3 percent, to $69.80 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for June delivery were up 85 cents, or 1.3 percent, at $66.54. Both contracts hit the highest level since mid-March earlier in the day.

Investors bet that easing lockdown restrictions in the United States and parts of Europe on the back of vaccination campaigns could further boost a rebound in fuel demand over the summer months.

The improving demand outlook offset concerns about higher OPEC+ supply and demand in India, the world's third-largest oil consumer, which is battling a surge in COVID-19 infections.

Crude prices were also supported by industry data showing a large fall in U.S. inventories.

The American Petroleum Institute (API) reported late Tuesday that U.S. crude stockpiles fell by 7.7 million barrels in the week ended April 30. That was more than triple the drawdown expected by analysts polled by Reuters.

Traders await data from the U.S. Energy Information Administration later in the day for further direction.