Oil extended gains above $70 a barrel after an industry report pointed to another draw in US crude stockpiles, reinforcing optimism around the demand recovery. On Tuesday, in New York, Future rose 0.4 per cent after settling above the threshold for the first time since October 2018.

Last week, the American Petroleum Institute had reported crude inventories declined by 2.11 million barrels, according to people familiar with the data. Also, the Middle Easter crude market showed signs of strength while adding a positive outlook.

The robust rebound has been underpinned by a demand recovery in the US, China and Europe, and there are signs the Covid-19 resurgence in Asia may be easing. The US State Department loosened its travel warnings for nations worldwide, which could pave the way for more airline travel.

The prompt time spread for Brent was 42 cents in backwardation, a bullish market structure where near-dated contracts are more expensive than later-dated ones. That compares with 37 cents at the beginning of last week. US gasoline stockpiles rose by 2.41 million barrels last week, while distillates, a category that includes diesel, increased by 3.75 million barrels. If government data due Wednesday confirms nationwide crude inventories dropped, it would be a third weekly decline.

Meanwhile, there are some indications that India’s deadly virus wave may be easing. The rate of new infections has slowed, while the nation’s oil refiners are taking advantage of weak demand to carry out maintenance in anticipation of a revival in fuel consumption in the coming months.