Oil prices rose Monday, a month after U.S. futures fell into negative territory for the first time, as economies start opening up amid the coronavirus pandemic.
West Texas Intermediate futures for June delivery, which expire Tuesday, settled 8% higher at $31.82 a barrel, after earlier climbing 12% to a two-month high of $32.85 per barrel. Brent oil prices, which have already rolled into July contracts, also pared gains to finish 7% higher at $34.81 per barrel.
“We’ve gone full 180 and rather than plunging to new depths, the rally is only gaining momentum, with the June contract up almost 10% and above $32 a barrel,” Oanda analyst Craig Erlam wrote in his morning note.
“The supply cuts of the last month combined with gradual reopening of various countries around the world has put a significant dent in the supply/demand imbalance and alleviated capacity concerns that led to last month’s panic.”
Oil Prices Lift Oil Stocks
Exxon Mobil (XOM) shares jumped 8% on the stock market today. Chevron (CVX) climbed 5.3%. Among top U.S. shale producers, EOG Resources (EOG) surged 10%, Pioneer Natural Resources (PXD) soared 13% and Parsley Energy (PE) was up 9.7%.
The OPEC+ production cuts took effect on May 1 and Saudi Arabia announced deeper cuts last week in an effort to help balance oil markets and boost oil prices.
Meanwhile, travel has started to pick up again as Europe and America ease Covid-19 restrictions, boosting demand for fuel.
“America is facing a very tight gasoline market. Gasoline prices are already on the rise, and refiners are dragging their feet as U.S. demand starts to make a comeback,” Phil Flynn, senior market analyst for the Price Group, wrote in his daily energy report.
Author: Gillian Rich
Source: Investors: Oil Prices Have ‘Gone Full 180’ As Rally Gains Momentum