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 traders put some decent headroom above that key level,” he said.
West Texas Intermediate crude for June delivery
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.
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
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
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.