UPDATE 6-Oil prices surge on demand hopes as lockdowns ease

* Reopenings in several countries, U.S. states fuel optimism

* UBS sees end-2020 Brent at $43/bbl, $55/bbl by mid-2021

* Air traffic may not recover for years, airline bosses warn (Updates prices, adds comment, background)

LONDON, May 5 (Reuters) - Oil prices soared higher on Tuesday on hopes for a recovery in vehicle traffic and fuel demand as some European and Asian countries along with several U.S. states began to ease coronavirus lockdown measures.

West Texas Intermediate (WTI) crude futures were up 18.1%, or $3.68, at $24.07 per barrel at 1400 GMT. The U.S. benchmark has closed higher for the last four sessions.

Brent crude futures were up 11.4%, or $3.11, at $30.31.

Italy, Spain, Nigeria and India, together with Ohio and other U.S. states, began allowing some people to go back to work and opened up construction sites, parks and libraries.

Vehicle traffic in most of the United States, including those yet to lift shelter-in-place orders, has also rebounded, RBC Capital Markets research said in a note.

U.S. President Donald Trump on Tuesday praised the rise in oil prices and hailed measures by the states to reopen their economies, a reversal from anger he has frequently mooted throughout his administration at price rises as the U.S. shale industry confronts unprecedented pain.

Swiss bank UBS said the easing of restrictions would help lead to a balance in supply and demand for the oil market in the third quarter and even projected an undersupply by the fourth, forecasting an end-2020 recovery of Brent to $43 per barrel and $55/bbl by mid-2021.

“The market is still vulnerable but now one thing is clear, the demand bottom is behind us,” Rystad Energy’s head of analysis Per Magnus Nysveen said.

“If you’re a trader and open the window, do you see traffic? Is it noisy? That’s the indication that demand is coming back, that the price rebound is not too far away.”

Reflecting hopes that the oil industry may have passed the worst of coronavirus-induced lockdowns, hedge funds and money managers were buyers of petroleum derivatives for a fifth straight week in the week ended April 28.

Morgan Stanley said the peak of oversupply in global markets had likely been reached and a storage crunch was abating.

“Inventories have built but not quite as strongly as feared: With social distancing measures ramped up in March ... the observed inventory increases have not been quite as strong as feared,” it said in a note.

Still, global oil demand and prices suffered historic losses in April and recovery is likely to be slow with air traffic not expected to rebound any time soon.

U.S. crude oil stockpiles were seen rising for a 15th consecutive week, while inventories of oil products also likely built last week, a preliminary Reuters poll showed. (Additional eporting by Shu Zhang in Singapore and Sonali Paul in Melbourne; Editing by Kirsten Donovan, Louise Heavens and Andrew Cawthorne)