Crude oil prices moved higher on Monday as positive news from biotech firm Moderna Inc. about an experimental COVID-19 vaccine, and reopening of businesses in several countries across the globe eased worries about outlook for energy demand.
A report from the Energy Information Administration saying crude oil production from major U.S. shale producers will see a significant decline in June further supported oil’s uptick.
West Texas Intermediate crude oil futures for June ended up $2.39, or about 8.1%, at $31.82 a barrel.
Brent crude futures for July settled at 34.81 a barrel, gaining 7.1%.
The OPEC and its allies’s decision to cut 9.7 million barrels per day or around 10% of global supplies, has offered some relief to a saturated market.
Saudi Arabia, the UAE and Kuwait have pledged to cut even more oil production in June while Riyadh pledged to cut a further 1m bpd, bringing its output to the lowest in 18 years.
Meanwhile, the demand for oil has improved with the resumption of economic activity.
Italy yesterday recorded its fewest daily deaths since March 9 and its fewest new infections since March 4 in the latest sign that the coronavirus crisis is easing.
Shops, bars and restaurants are re-opening today along with churches such as St Peter’s Basilica in the Vatican.
The country will re-open its borders on June 3 and travel restrictions will be lifted in a ‘calculated risk’ to rescue its tourism industry after the coronavirus crisis. New York and Spain are also gradually removing restrictive measures.
On the vaccine front, biotech firm Moderna Inc said its experimental coronavirus vaccine mRNA had produced antibodies in all 45 trial participants.