Oil prices extended gains on Tuesday as hopes of a solid recovery in fuel demand following the reopenings of the US and European economies offset concerns over spreading COVID-19 cases in Asia.

Share Market Live

NSE

Brent crude oil futures were up 19 cents, or 0.3 percent at $69.65 a barrel by 0517 GMT, while West Texas Intermediate (WTI) was up 18 cents, or 0.3percent at $66.45 a barrel.

Both contracts rose more than 1 percent on Monday.

"Behind the gain is growing optimism of strong recovery in gasoline and other fuels in the United States and Europe in light of easing of various pandemic-related restrictions," said Chiyoki Chen, chief analyst at Sunward Trading.

"There are concerns about spreading infection cases in Asia, but it will be solved in a matter of time as the vaccine spreads," he added, predicting that Brent prices will be headed toward $75 a barrel later this month.

US President Joe Biden will send at least 20 million more COVID-19 vaccine doses abroad by the end of June, marking the first time the United States is sharing vaccines authorised for domestic use.

The British economy reopened on Monday, giving 65 million people a measure of freedom after a four-month COVID-19 lockdown. And with accelerating vaccination rates, France and Spain have relaxed restrictions, and Portugal and the Netherlands have opened up travel.

In the United States, New York state will no longer require masks in most public spaces for people fully vaccinated against COVID-19 as of Wednesday, and other regions are opening up their economies as well.

In Asia in contrast, Singapore reported the highest number of local infections in months and Taiwan saw a spike in cases, and both countries have reinstituted lockdown measures.

In India, the second-hardest hit by the pandemic, domestic sales of gasoline and diesel by state refiners plunged by a fifth in the first half of May from a month earlier as pandemic lockdowns hit industrial activities and consumption, preliminary data showed on Monday.

"Some expectations that negotiations between Iran and the United States may lead to a resumption of Iranian oil exports is limiting the upside of oil prices," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

With regard to the Iran-US talks, as the United States tries to reinstate the 2015 Iran nuclear deal, it is tiptoeing through a minefield of sanctions put down by former US President Donald Trump after he abandoned the deal three years ago.

(Edited by : Kanishka)