Oil futures rose higher in Tuesday’s trading as prices reached their highest level since March. A ripple effect was seen in Oklahoma prices as one firm saw its shares increase nearly 11% in value.
West Texas Intermediate crude for August delivery was up $1.15 a barrel or 2.8% to settle at $41.96 after gaining less than 1% on Monday. The front-month contract ended at its highest level since March 5. September crude is now the front month and settled up $1 or 2.4% at $41.92 a barrel.
September Brent crude, considered the global benchmark was up 2.4% or $1.04 at $44.32 a barrel. The gain on Tuesday left Brent at its highest level since March 6.
Why the increase? Markets responded more positive about the world’s ability to address the COVID-19 pandemic which resulted in a crushing demand for crude and its byproducts.
MarketWatch reported that a historic stimulus package forged by the 27-nation European Union after marathon negotiations since Friday, helped to set the stage for a climb higher for oil. Investors also may also becoming more assured that countrys can beat back a surge in COVID-19 cases. Investors cheered the positive results from at least two experimental COVID-19 vaccines Monday.
The catalyst for the overnight crude spike is the stimulus package in Europe “that will feed demand and allow a risk-on attitude to drive markets higher and create economic forces that will burn more oil,” said Phil Flynn, senior market analyst at The Price Futures Group.
The EU agreed a €750 billion ($860 billion) coronavirus rescue fund, and investors also are watching for developments with additional fiscal stimulus measures from the U.S., which could help curtail the recession that has been wrought by the pandemic.
Some local markets responded in kind with Oklahoma City-based Devon Energy seeing a nearly 11% jump in the value of its shares. Devon rose $1.08 a share or 10.52% to finish Tuesday’s trading at $11.35. The day’s low was $10.69 while the highest level was $11.63 before shares settled at the $11.35 mark.
ConocoPhillips rose $2.33 or 5.92% to settle at $41.66 while EOG Resources saw an increase of $2.72 a share for a 5.70% rise, finishing the day at $50.42.
Marathon Oil rose 37 cents or 6.73% to hit $5.86 a share. ONEOK jumped 6.12% or $1.73 a share to end the day at $29.88.
Phillips 66 jumped 6.56% or $4.09 a share and finished trading on Tuesday at $66.42.
On Utilities Sector, American Electric Power was up 84 cents or 0.96% and ended the day at $87.56.