Brent pares gains after crossing $86, WTI crude rises 2%

Oil drilling rigs

Oil prices extended gains on Monday as demand continued to recover with countries easing COVID-19 precautionary measures.

The international benchmark Brent crude was trading up 1.3% at $85.98 per barrel, at 1.40 pm Makkah time. The contract touched $86.04 earlier in the session, the highest level since October 2018, Bloomberg reported.

WTI crude rose 1.9% to $83.85 per barrel.

“Easing restrictions around the world are likely to help the recovery in fuel consumption,” Reuters reported, citing a note from ANZ bank.

“The jet fuel market was buoyed by news that the US will open its borders to vaccinated foreign travellers next month. Similar moves in Australia and across Asia followed.”

The note added that gas-to-oil switching for power generation alone could boost demand by as much as 450,000 barrels per day in the fourth quarter.

Meanwhile, according to forex trading firm OANDA, cold temperatures in the northern hemisphere are also expected to worsen an oil supply deficit.