Brent climbs to four-month high on EU stimulus package

“The idea that things are going to continue to recover, demand is going to push back to pre-pandemic levels and there’s going to be enough supply off the market to keep tightening the picture, is where the buying is coming from,” said Gene McGillian, vice-president of market research at Tradition Energy.

But pandemic-driven demand concerns spurred by the virus are not yet in the rear-view mirror, challenging prices from posting a stronger breakout rally. Far more people were infected with the novel coronavirus than previously reported in several corners of the US, according to data released on Tuesday by the Centers for Disease Control and Prevention.

In the New York City metropolitan area, the CDC estimated based on samples collected in March and April that the number of people who contracted the virus could be at least 12 times the number of reported cases.

“We don’t have this virus under control in terms of number of cases and yet oil prices are still moving higher,” said Stewart Glickman, an energy equity analyst at CFRA Research. “One of two things happens, either the market is anticipating some kind of remedy that’s around the corner or folks are going to be disappointed and oil’s going to come back for a relapse.”

Meanwhile in the US, crude stockpiles probably declined by 2.2-million barrels last week, according to the median estimate in a Bloomberg survey. Domestic oil supplies are sitting at the highest seasonal level in decades. The survey also showed that fuel supplies probably dropped for a third straight week.

The government will release weekly inventory data on Wednesday.

Bloomberg