Oil hits highest level in more than a year with demand expected to recover as COVID-19 vaccine expands

Oil hits highest level in more than a year with demand expected to recover as COVID-19 vaccine expands

Oil prices spiked 2% on Monday and hit their highest level in more than a year as tightening supply and an expected recovery in demand brightened a recently grim outlook for the industry.

WTI Crude Oil traded up 2.3% to $58.14 per barrel in Monday afternoon trades, while Brent Crude jumped 2.1% to $60.60.

Oil hasn't traded this high since January 2020, right before the COVID-19 pandemic represented a significant risk to markets and the economy.

But the rollout of COVID-19 vaccines from Pfizer and Moderna are boosting expectations that a return in demand for oil is imminent as consumers begin to travel again.

According to Bloomberg's vaccine tracker, more than 2 million Americans were vaccinated on Saturday, and more than 42 million Americans have already received at least one dose of the vaccine. Daily COVID cases also fell below the 100,000 mark on Sunday, marking the lowest number daily cases in over three months.

As COVID cases continue to decline and vaccinations continue to increase, pent-up demand from consumers will likely be unleashed on the economy as more and more people feel comfortable traveling and gathering.

A recovery in travel is important for oil, as transportation via cars and planes represents the biggest source of