Oil prices climb on favourable outlook for U.S. fuel demand

Brent was up 2 cents at $62.97 a barrel by 0510 GMT

  
A general view of the drilling platform, the first out of four oil platforms to be installed at Norway's giant offshore Johan Sverdrup field during the 1st phase development, near Stord, western Norway September 4, 2017. Image used for illustrator purpose

A general view of the drilling platform, the first out of four oil platforms to be installed at Norway's giant offshore Johan Sverdrup field during the 1st phase development, near Stord, western Norway September 4, 2017. Image used for illustrator purpose

REUTERS/Nerijus Adomaitis

TOKYO - Oil was little changed on Monday amid hopes that fuel demand is picking up in the U.S. as the summer driving season approaches and COVID-19 vaccinations there accelerate, although rising case numbers in other countries are keeping a lid on prices.

Brent was up 2 cents at $62.97 a barrel by 0510 GMT, having risen to as high as $63.30. U.S. crude gained 1 cent to $59.49 a barrel, after rising as much as 46 cents earlier.

Prices have changed little since a period of volatile trading ended last Monday.

"At the moment, the market lacks direction," the Schork Report, founded by Stephen Schork, said in a note. "We are waiting for a breakout of the current range."

While the United States has fully vaccinated more than 70 million people, and in Europe new infection numbers are falling as lockdowns take effect, India is reporting record new cases and other parts of Asia are seeing caseloads rise.

That is likely to continue to keep a lid on any revival of global travel and keep prices rangebound as the summer approaches, analysts and traders said.

The U.S. economy is at an "inflection point" amid expectations that growth and hiring will accelerate in the months ahead, but faces the risk of reopening too quickly and sparking a resurgence in coronavirus cases, Federal Reserve Chair Jerome Powell said in an interview broadcast on Sunday.

"There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we'll see another spike in cases," Powell said in a CBS interview, recorded on Wednesday.

On the production side, no new oil drilling rigs were started in the United States in the most recent week, according to a widely watched report published by Baker Hughes. RIG/U

(Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell and Gerry Doyle) ((aaron.sheldrick@thomsonreuters.com; 81-80-2677-4134;))

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