Contracts for oil on Monday were headed sharply higher, supported apparently by optimism that the globe would power through a recent climb in cases of COVID-19.
In the U.S., five states—Michigan, New York, Florida, Pennsylvania and New Jersey—accounted for some 42% of newly reported cases, the Wall Street Journal reported, with experts pointing to fatigue from employing social-distancing measures to deal with the pandemic and experts also pointing to school sports as a major source of transmission.
Elsewhere, India reported more than 168,000 new cases over a 24-hour period on Monday, with that surge helping India surpass Brazil as the second-worst country infected by COVID after the U.S., according to public data.
On top of that, Europe’s largest economy Germany said it was preparing new legislation enabling the country to impose national COVID restrictions without regional government approval.
However, market participants may be shaking off those reports and responding more to positive comments from Federal Reserve Chairman Jerome Powell, who described the U.S.’s current recovery from COVID as at an “inflection point” and projected a strong rebound in coming months, speaking at a “60 Minutes” interview that aired on Sunday.
“Oil prices are continuing their uptrend as traders believe that supply concerns are likely to be addressed by rising demand,” said Naeem Aslam, an analyst at AvaTrade, in a Monday research note.
“There is optimism about the global economy and how we are experiencing a recovery in economic growth,” the AvaTrade researcher wrote.
On Monday, West Texas Intermediate crude for May delivery
was trading 78 cents, or 1.3%, higher at $60.09 a barrel on the New York Mercantile Exchange.
Global benchmark June Brent crude edged
was trading 82 cents higher to reach $63.80 a barrel, a gain of 1.4% on ICE Futures Europe.
Last week, WTI fell 3.5% and Brent marked a weekly loss of 2.9%, according to Dow Jones Market Data.
On Friday, oil prices fell amid concerns about growing supply and weakening appetite for energy, as global cases of COVID rose in Europe, Brazil and India in particular, prompting prices to post a loss for the week.