Oil up 3% on stronger demand outlook; Mexican oil rig outage | Reuters

Oil up 3% on stronger demand outlook; Mexican oil rig outage | Reuters

Oil prices rose 3% on Tuesday, extending sharp gains from the previous session, boosted after U.S. regulators issued their first full approval for a COVID-19 vaccine and Mexico suffered a large production outage due to a fire on an oil platform.

Brent crude oil futures settled up $2.30, or 3.4%, at $71.05 a barrel, while U.S. West Texas Intermediate (WTI) gained $1.90, or 2.9%, to settle at $67.54.

Last week, both benchmarks notched their biggest weekly losses in more than nine months. On Monday, both jumped more than 5%, boosted by a weaker dollar.

Despite a resurgent pandemic, "economically harmful containment measures seem rather unlikely", said Julius Baer analyst Norbert Rucker, citing the effectiveness of vaccines.