Oil prices jumped to its highest level in the past two months on Monday, due to positive news about a potential coronavirus vaccine, optimism about economic activity, and positive results that producers are following planned output reductions.
Brent LCOc1 futures for July delivery rose $2.31, or 7.1%, to $34.81 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose $2.39, or 8.1%, to $31.82.
The Petroleum market returned to the wreckage in March and April after the production cut agreement between the Organization of the Petroleum Exporting Countries (OPEC) and the group known as OPEC + and Russia failed, and it took more than two months to clear.
As a result of the agreement, oil exports declined sharply in the first half of May, companies taking care of outputs made a strong start in complying with the production outage agreement.
OPEC and its allies have committed a record restriction, starting from May 1, with 9.7 million barrels (bpd) per day. Saudi Arabia the largest exporter in the world announced that it will cut 1 million barrels a day more in June last week.
The rally in the June WTI CLM0 contract, which will end on Tuesday, states that the negative situation of last month’s historical plunge of $ -40 per barrel, will not be repeated.
July WTI CLN0 was the more actively traded U.S. futures contract with volumes in the second-month contract outpacing the front-month for several days now. The July contract closed up 7.2% to $31.65.
In the United States, more and more people have begun trading on the stock market, with the help of gradual opening of coronavirus interlocks, the gradual resurgence of business and social life, and the potential vaccine outcomes begin to yield early results.
According to preliminary data from the COVID-19 vaccine tested in the U.S., it indicated that a small group of healthy volunteers produced protective antibodies.
The summer season also convinces the countries which are intended to quit the coronavirus lockups gradually. While shops and restaurants are reopening in Italy on Monday, other centers of the epidemic, such as Spain and Portugal, will gradually lift restrictions.