Yesterday the oil markets advanced, in light of a possible increase in the oil demand and tighter supply. The US stock markets rallied, despite the fact that a peak in the number of cases is being reported in some developed countries.
The West Texas Intermediate crude oil futures advanced by 0.59 percent, closing at the 40.63 level, followed by the Brent oil futures, which gained 0.37 percent during yesterday's session and closing at the 43.10 level.
"We believe that oil market participants are focusing on the current demand trends but are still ignoring the long-term implications of the corona pandemic," commented an analyst at Commerzbank.
It is known that the number of operating U.S. oil and natural gas plants have dropped for the ninth consecutive week, which added to the fact that the OPEC+ members are actively attempting to restrict the supply. The different world economies are also reopening, which means that it's very likely that there will be a peak on oil demand, assuming that the different governments won't reimpose restrictions.
At the moment, the coronavirus pandemic advances around the world, as it has infected around 11,755,936 individuals and killed around 541,079. In the United States, where the cases are peaking, there are 3,041,035 infected individuals as well as a death toll of 132,981, making the US the most affected country in the world, only followed by Brazil and India. The concerns for a second wave of the outbreak are increasing, now that countries like Israel and the United States are reporting a peak in the number of cases.
Atlanta Federal Reserve Bank President Raphael Bostic commented that the current economic recovery is at risk of stalling because of the prospects for a second wave of the Covid-19 outbreak.
“There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise,” he said during an interview with the Financial Times, “And so we’re watching this very closely, trying to understand exactly what’s happening,” he added.
The US stock markets also closed on the positive territory. The S&P 500 gained 1.59 percent during the session, closing at the 3,179.72 level. Conversely, the Dow Jones Industrial Average advanced 1.78 percent, closing the session at the 26,287.03 level, while the Nasdaq 100 added 2.53 percent, closing at the 10,604.06 level.