Oil rose on Tuesday to hit $70 a barrel for the first time since March, as expectations of demand recovery following re-openings of the European and U.S. economies offset concern over spreading coronavirus cases in Asia.
The international benchmark crude, Brent, gained 1% to trade at $70.15 a barrel with the US crude grade WTI at a high of $66.92. The steady rise in oil price is positive for Fx rates and reserve accretion in Nigeria but also means the cash strapped government is spending more on petrol subsidy.
Stocks and U.S. futures rose Tuesday as optimism that economic re-openings will boost growth outweighed concern about a pick-up in virus cases in parts of Asia but the Dollar dipped.
The Dollar fell toward a four-month low, while U.S. 10-year treasuries were steady as investors awaited key housing data ahead of minutes due Wednesday from the Federal Reserve’s last meeting. Brent crude topped $70 a barrel in London for the first time since mid-March on signs that re-openings are boosting demand.
Stocks have been volatile after climbing to a record in early May as investors assessed the prospects of economic expansion against a resurgence in coronavirus cases in countries including India. With rising inflation expectations stoking concern about policy tightening, traders will also parse the Fed minutes for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases.