Oil futures were up in Monday’s trading and analysts credited improved energy demand, even as the world pandemic from COVID-19 has grown.
West Texas Intermediate crude jumped 3.14% or $1.21 a barrel, ending Monday’s trading on the New York Mercantile Exchange at $39.70.
The Brent benchmark on the ICE Futures in London rose 66 cents or 1.6% to settle at $41.68 per barrel.
“As global demand recovers, oil’s natural inclination is to go higher, since current prices are below the economic threshold for most producers,” Manish Raj, chief financial officer at Velandera Energy, told MarketWatch.
The market saw upbeat economic data over the weekend from China, the world’s biggest importer of crude. Industrial profits in China for May were up 6% from a year earlier, representing the first increase in 2020, official statistics released over the weekend showed.
There are also signs of further slowdowns in oil production. “To sum up the American producers’ standpoint, domestic rig count is down 73% from last year,” so oil has resumed its trend upward, said Raj.
Still, “the greatest spoiler last week was the recovery in U.S. oil production by 500,000 barrels a day,” as reported by the Energy Information Administration, he said. “Traders now fear that at least some of the shut in wells…could quickly spring back and spoil the recent recovery.”
Local energy stocks were up too with Devon Energy seeing an 18-cent or 2% increase to finish the day at $11.12 a share. EOG Resources rose 2% or 89 cents to settle at $49.65. Marathon Oil rose 4% or 22 cents a share and finished at $5.96.
ONEOK rose 3.2% or $1 to end at $31.81. SandRidge Energy dropped 5% or 6 cents a share before finishing the day at $1.25.
In the Utilities Sector, American Electric Power rose $1.57 a share for a 2% increase and settled at $79.56.
Natural gas prices rose 17 cents or 11% for the day and ended the day at $1.71 per MMBtu.