Brent Crude Oil Extends Gains to $40.69 Per Barrel on Tuesday

Brent Crude Oil Gains More Than 2 percent During Asian Session

Brent crude oil extended its gains to $40.69 per barrel on Tuesday morning during the Asian trading session.

The international oil benchmark used to measure Nigerian oil plunged to $36.950 a barrel on Friday and recovered partially on Monday to $39.41 per barrel before it crossed $39.68 resistance levels to $40.69 per barrel.

Oil extended its gains after signs point to a recovering global oil market and reports that OPEC and allies, known as OPEC plus, have started complying with production cuts agreement reached in May.

In a comment attributed to the Energy Minister of United Arab Emirates, the minister said other members of the cartel that failed to meet their quota last month are presently complying and also noted the improvement in demand for the commodity globally. That is largely due to the reopening of economies following global lockdown that erodes global productivities.

“That seemed to take away some of the market’s negativity,” said Phil Flynn, senior analyst at Price Futures Group. “It’s fear about the coronavirus versus the reality of what’s happening on the ground.”

However, despite data showing Chinese crude oil demand rose by 8.2 percent from a year ago, the spark in coronavirus cases remains a concern.

Recent reports showed the United States reported more than 25,000 new COVID-19 cases on Saturday. While China that has been freed from the virus for two months reported 79 new cases, fueling concerns that the deadly virus if no cure may continue to disrupt global activities and further shrink demand for crude oil.