By Geoffrey Smith

Investing.com – prices soared on Monday after a weakening in a closely-watched U.S. business survey banished any lingering worries that monetary policy will soon start to tighten.

The Institute of Supply Management’s manufacturing survey for April showed activity expanding at a rapid rate, although its main index weakened from a 36-year high in March, a level that had provoked some fears of overheating.

By 10:55 AM ET (1455 GMT), U.S. crude futures were up 1.6% at $64.59 a barrel while the international marker rose 1.5% to $67.75 a barrel.

Underlying demand appears undimmed however, especially in the U.S., where airports reported another weekend of post-pandemic highs for passengers. The overall level of passengers was still some 35% off pre-pandemic levels, however.

At the same time, U.S. gasoline demand rose 3% last week to the second-highest level since the pandemic started, with Sunday demand levels nearly 5% over the four-week average, according to data from GasBuddy.

U.S. rose 1.8% to a new seven-week high of $2.1169 gallon.

Earlier, data from the Energy Information Administration showed that U.S. oil supply had fallen by nearly 1.2 million barrels a day as a result of the winter storms that hit Texas and other oil-producing regions. 

The most important factor stopping oil from making bigger gains remains the Covid-19 crisis in India, which recorded yet more record high numbers of new cases and deaths over the weekend.

Short-term mobility indicators from the subcontinent continue to imply a sharp drop in fuel consumption, and the holding of elections over the weekend in various states also removes a political hurdle to further restrictions on travel.