Oil climbed as optimism over easing travel restrictions and the global economic recovery offset falling demand in India, the world’s third-biggest importer.

Futures rose as much as 1.4% in New York after flipping between gains and losses earlier Monday. A European Union plan to ease restrictions for vaccinated travelers over the summer travel season is boosting sentiment. The U.S. dollar weakened, making commodities priced in the currency more attractive, while a rally across U.S. equities also supported prices.

“It’s a good news, bad news scenario on the demand front, with various reopenings” offsetting surging cases elsewhere, said John Kilduff, a partner at Again Capital LLC. Prices “would be considerably higher if it wasn’t for what’s going on in India and the drag that represents on the market.”

U.S. benchmark crude futures have rallied more than 30% this year, but the market continues to face an uneven global demand recovery as some countries suffer from new waves of coronavirus cases. Sales of gasoline in India were the lowest in April since August, while average daily diesel sales were the lowest since October, preliminary data from officials with direct knowledge of the matter show.

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“Developed markets are experiencing an economic and petroleum demand recovery and global oil inventories have largely normalized,” Bank of America Global Research analysts including Francisco Blanch wrote in a weekly report. But “a full oil demand recovery will also require a healthy economic backdrop in emerging markets.”

Iraq’s oil minister, Ihsan Abdul Jabbar, said crude would probably remain around $65 in the coming months. OPEC, of which Iraq is the second-biggest producer, will continue trying to keep prices “within normal averages,” he told reporters in Baghdad on Monday. “There is no concern about a drop in prices.”

Prices
West Texas Intermediate for June delivery gained 84 cents to $64.42 a barrel as of 10:09 a.m. in New York Brent for July settlement rose 28 cents to $67.53 a barrel

Traders are tracking talks between the Iran and world powers including the U.S. over the revival of a nuclear accord. A deal would potentially lead to Washington easing sanctions on Iranian crude exports, though U.S. officials said a deal isn’t close yet. The Islamic Republic has presidential elections next month, which may complicate the talks.

“The market is ready for it and has been pricing it in to a certain extent,” Mike Muller, Vitol Group’s head of Asia, said Sunday on a call hosted by consultant Gulf Intelligence. “It’s a question of when this agreement takes place -- is it this month or after the elections under the next Iranian administration?”

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Iraq, OPEC’s second-biggest oil producer, said crude prices would probably remain around $65 a barrel in the coming months and announced it’s considering buying Exxon Mobil Corp.’s stake in one of the world’s biggest fields. Abu Dhabi has for the first time set the price for its Murban grade based on futures trading in the Middle Eastern petrostate. Russia increased its oil production in April thanks to a more generous OPEC+ quota.