(Bloomberg) — Oil’s rally extended to a fourth day as a combination of recovering demand, production cuts and promising test results for a coronavirus vaccine brightened the outlook for energy prices.Futures in New York rose around 4% to past $33 a barrel after closing at the highest level in almost 10 weeks on Monday. The June contract expires Tuesday but a repeat of last month’s plunge below zero is highly unlikely. There were far higher trading volumes in the July contract, which advanced around 3%.Crude got an extra boost on Monday after American biotechnology company Moderna Inc. said its vaccine showed signs it can create an immune-system response to the virus, helping to spur broad financial market gains. Meanwhile, West Texas Intermediate’s front-month contract settled above the July contract for the first time since January, moving into a market structure known as backwardation that signals concerns over storage capacity have eased.Chinese oil use is almost back to pre-virus levels, while a jump in Indian fuel sales shows the worst may be over there as lockdown restrictions are eased. Italians were allowed to go back to restaurants and New York is set to open a sixth region as some of the hardest-hit areas in Europe and North America move ahead with restarting their economies.On the supply side, shale oil output from the U.S., the world’s biggest producer, is forecast to fall to the lowest since late 2018 next month, according to the Energy Information Administration. There’s also been a “stunning reversal” in OPEC+ shipments so far in May, data intelligence firm Kpler said, after the alliance’s deal to curb production kicked in at the beginning of the month.WTI for June delivery rose 4.1% to $33.12 a barrel on the New York Mercantile Exchange as of 8:27 a.m. in Singapore after closing up 8.1% on Monday. The more active July contract climbed 3.1% to $32.63. Brent for July settlement advanced 2.4% to $35.65 on the ICE Futures Europe exchange.Chinese oil demand has recovered to about 13 million barrels a day, according to executives and traders who monitor the country’s consumption. That’s just shy of the 13.4 million barrels a day in May 2019 and 13.7 million barrels a day in December. The overall number would be higher were it not for jet-fuel demand, which is still running well below a year’s ago level, they said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
from Yahoo Finance https://ift.tt/2X7xqR0
Leave a Reply