Brent crude oil has jumped back above $70 a barrel, regaining a level it has only briefly traded at since the beginning of the pandemic and stoking wider inflation fears as raw material prices soar.
The international oil benchmark, which slumped below $20 a barrel last April as Covid-19 lockdowns hammered fuel demand, is now comfortably back at its pre-pandemic level as traders bet oil demand will rise later this year.
The rollout of vaccines in developed countries and the tapering of restrictions is expected to lead to a surge in international travel and a pick-up in the wider economy, while concerns about long-term supplies of commodities such as copper and oil have intensified.
“The euphoria is reflected in the general belief that the economic revival will be soon coupled with oil demand recovery,” said Tamas Varga, an analyst at PVM oil brokerage in London.
He cautioned, however, that the recovery still faces some headwinds such as the emergence of the…