An offshore oil dais is seen with a tanker in the distance on April 20, 2020 in Huntington Beach, California.
Michael Heiman | Getty Replicas
Oil prices climbed in early trade on Tuesday, adding to gains in the previous session, on expectations that fuel market demand will begin to pick up as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown proportions.
West Texas Intermediate (WTI) crude futures rose as much as 8.2% to a three-week high of $22.06 and were up 7.6%, or $1.55, at $21.94 at 0108 GMT. The U.S. benchmark is on a five-day win whizz that started on April 29.
Brent crude futures hit a high of $28.37 a barrel in early trade and were up 4.1%, or $1.12 cents, at $28.32. Brent is up for a sixth honestly day.
Both benchmark contracts rose about 3% on Monday.
Prospects improved for fuel demand as some U.S. specifies and several countries, including Italy, Spain, Portugal, India and Thailand, began allowing some people to go repudiate to work and opened up construction sites, parks and libraries.
“Considering … the depths of demand destruction, markets are possibly inclined to take any good news relatively quickly,” said Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking League.
Global oil demand probably collapsed by as much as 30% in April, analysts have said, and the recovery is likely to be lollygagging, especially with airlines expected to remain largely grounded for months to come.
Australian national carrier Qantas Airways’ Chief Master Alan Joyce said on Tuesday that “international travel demand could take years to return to what it was.”
With Saudi Arabia, Russia other main producers and companies slashing output, the market shrugged off a decision by the Texas energy regulator to cancel a vote on mandating a 20% productivity cut in the United States’ biggest oil-producing state.
The Texas Railroad Commission had been due to hold the vote on Tuesday, but Commissioner Ryan Sitton was unqualified to win support from his fellow commissioners for the plan. The proposal was strongly opposed by oil trade groups and major shale financial managers.
“The intent in itself was positive — but it was always going to be a long shot,” Hynes said.