Oil rises on demand optimism

Oil prices rose by two per cent early yesterday, buoyed by market expectations that fuel demand globally is rising with the re-opening of major economies in Europe and higher travel numbers in the United States.

WTI Crude was up 2.14 per cent at $64.95 and Brent Crude had risen by 2.02 per cent at $67.79.

Earlier in Asia trade, oil prices were rising by more than 2.5 per cent, after Iran said over the weekend that its three-month agreement with the International Atomic Energy Agency (IAEA) for monitoring nuclear activities had ended and the agency would not have access to data collected from cameras inside Iranian nuclear facilities.

“From May 22 and with the end of the three-month agreement, the agency will have no access to data collected by cameras inside the nuclear facilities agreed under the agreement,” Iran’s semiofficial Fars news agency quoted Mohammad Baqer Qalibaf as saying, Radio Free Europe reported.

Oil prices rose on this news early yesterday, as the market was thinking about the narrowing window for the global powers to reach an agreement for the return of Iran and the United States to the nuclear deal.

Later yesterday, however, the IAEA issued a press release that its Director General Rafael Mariano Grossi had agreed with Iran to extend by one month to June 24 the necessary verification and monitoring activities carried out by the agency in the Islamic Republic.

“The expiration of the Technical Understanding, which enabled the Agency’s verification and monitoring, would have been a serious loss at this critical time,” Grossi said. “This agreed way forward ensures continuity of knowledge for a limited period of time.”

Meanwhile, the U.S. Transportation Security Administration (TSA) reported 1,863,697 traveler throughput at American airports on May 23, the highest number since the pandemic started grounding flights in March last year.

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