U.S. crude-oil prices looked to add to a climb toward a two-month high for the commodity in electronic trade on Sunday, supported in large part by efforts to rebalance a supply-demand dynamic that had been blown out of whack due to the debilitating effects of the COVID-19 pandemic.
“The balance of risk has tilted to the upside,” wrote Stephen Innes, global chief market strategist at AxiCorp, in a daily research note.
“Oil prices may show further upside momentum even more so as the easing in mobility restrictions grows,” he wrote. “Indeed, the market is knocking in WTI $30 door, which will be a significant psychological inflection point if tr aders put some decent headroom above that key level,” he said.
West Texas Intermediate crude for June delivery
CLM20,
+4.41%
was up $1.19, or around 4%, at $30.71 a barrel late Sunday in electronic trade in New York. On Friday, prices logged a weekly gain of 19%, according to Dow Jones Market Data.
The June contract expires at Tuesday’s settlement and investors have been attuned to volatility in crude prices after the May contract marked a historic traverse into subzero territory on April 20.
The July contract
CLN20,
+4.13%,
which is the most-actively traded and is soon to be the front-month contract
CL.1,
+4.41% ,
climbed $1.13, or 3.8%, at $30.66 a barrel.
Both U.S. benchmark contracts were hovering around the highest levels since mid- to early March, according to FactSet data.
Meanwhile, global benchmark July Brent crude
BRNN20,
+3.78%
gained $1.27, or 3.9%, at $33.77 a barrel, after putting in a 4.9% weekly rise on Friday.
Crude markets have staged a remarkable rebound after skidding into uncharted territory last month, with the May contract plunging nearly 300% to settle at negative-$37.63 a barrel. However, actions taken by members of the Organization of the Petroleum Exporting Countries and other major producers to cut some 9.7 million barrels a day in oil through the end of June have helped to stem a flood of crude that had failed to attract buyers as economies came to a screeching halt to curtail the spread of the worst pandemic in more than a century.
Read:Oil prices could go negative again, so be prepared, CFTC warns futures industry
Bullish oil investors also have waxed more optimistic as Saudi Arabia said it would cut an extra 1 million barrels a day in June, with the United Arab Emirates and Kuwait also contributing more than their targets.
Meanwhile, in the U.S., data from Baker Hughes
BKR,
-1.71%
on Friday showed that the number of active U.S. rigs drilling for oil dropped by 34 to 258 this week. That decline represents a nearly 60% tumble in active rigs since a recent peak count back in March, which Rystad Energy says may be the biggest such drop ever recorded.