Oil jumped to levels not seen since Covid-19 lockdowns paralysed the world’s largest economy as Chinese demand returned and signs of a viable vaccine sparked optimism.
Futures in New York climbed as much as 13.2 per cent on Monday. Chinese oil use is at 13 million barrels a day, just shy of the levels of a year earlier, traders and executives said. Moderna reported promising early results from an experimental vaccine, tempering fears of a virus resurgence and offering hope that economies can safely reopen.
“If China can get back to pre-Covid demand levels, and China is, at least from a virus standpoint, about two months ahead of everybody else, then the oil market is interpreting that as there is light at the end of the tunnel for us too,” Stewart Glickman, energy equity analyst at CFRA Research in New York said referring to US demand. “Initially it’s positive pretty much across the board,” Glickman said referring to a return of demand.
It’s not just China that’s seeing a recovery in consumption. Indian diesel sales were 75 per cent higher during the first half of May, compared with a month earlier.