Oil Extends Gains as More Economies Reopens

• Oil Extends Gains as More Economies Reopens

Oil prices extended gains on Tuesday during the Asian trading session as more economies reopened for business.

The demand for the commodity rose with reports that businesses, especially refineries have stated reopening for business operations. This, coupled with the reported declining oil supply boosted prices.

“Oil fundamentals are finally showing signs of improvement, and prices are reacting positively,” said AxiCorp global markets strategist Stephen Innes.

“Supplies have started to decline quickly, with signs of demand improving even as major economies are in the nascent stages of reopening.”

Brent crude oil, against which Nigerian oil is measured, gained 5 percent or $2.1 to $29.40 per barrel on Tuesday at 8 am Nigerian Time.

While the US West Texas Intermediate (WTI) rose as much as 8.2 percent to a three-week high of $22.06 per barrel.

Experts attributed the recent surged in prices to the expected improvement in demand as businesses and economies are reopening for business after COVID-19 pandemic disrupted and plunged global demand for the commodity.

“Considering … the depths of demand destruction, markets are probably inclined to take any good news relatively quickly,” said Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking Group.