Crude oil prices rallied higher at the first trading session of the week boosted by the growing hopes for fuel demand recovery in the second half of this year and curbs in oil production from major producers.
Oil traders are currently excited, that the COVID-19 weekly death toll in the world’s largest economy has dropped to a four-month low, and the number of new cases also plunged, thereby improving the country’s energy demand outlook.
At the time of drafting this report, Brent crude futures jumped by 1.17% to $69.99 a barrel and the West African Texas Intermediate surged by 1.17% to $66.38 a barrel. Both major oil benchmarks stayed above the $65 mark.
READ: Oil gains 15% in February, as Saudi Arabia’s output curbs help
Oil traders are going long on recent report revealing the Saudis curbed the supply of April-loading crude to at least four north Asian buyers by up to 15%
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics gave critical insights on Oil price movements and macros affecting it,
“Wall Street continues to upgrade the US consumer spending outlook, which is favourable for oil prices too. Still, oil is showing signs of consolidation after a supercharged multi-month rally.
“Oil prices are trading a touch higher this morning as dip buyers emerge ahead of the widely expected US economic forecast upgrade by the US Fed this week at the Wednesday-rate decision.
“Also helping oil prices, the US rig count fell, indicating US producers’ response to higher prices remains meek.”
READ: Oil traders weigh if COVID-19 support programs will buoy economic growth
What to expect: Oil traders hope prices continue to surge higher into the summer, and given the rosy US reopening narrative, more and more vehicles take the highways ahead of what is likely to be the biggest pent-up driving season in the world’s largest economy.
