Crude oil prices climbed higher on Monday despite concerns about the outlook for energy demand amid sharp spikes in new cases of coronavirus in the U.S. and several other parts across the globe.
Better than expected economic data from China and the euro area pushed up oil prices today.
Fears of a second wave of the virus pandemic have raised the possibility of another lockdown. In the event of another round of shutdown, energy demand may significantly drop, and crude supply will far exceed demand despite the planned output reductions by major oil producers.
West Texas Intermediate Crude oil futures for August ended up $1.21 or about 3.1% at $39.70 a barrel.
Brent crude futures advanced $0.74 or about 1.8% to $41.76 a barrel.
According to data released by China’s national bureau of statistics, profits at China’s industrial firms in May rose 6% year-on-year to 582.3 billion yuan ($82.28 billion), rising for the first time in six months. The rise suggests the country’s economic recover is gaining traction and brightening the outlook for manufacturing investment and jobs.
In April, industrial profits had tumbled 4.3%. From January to May 2020, China’s industrial profits were down 19.3%, compared to a 274% slump during January – April.
Eurozone economic sentiment improved at the strongest pace on record in June, data published by the European Commission showed.
The economic sentiment index climbed 8.2 points to 75.7 in June. However, the reading was below economists’ forecast of 80.0.
According to preliminary data from Destatis, German inflation rose unexpectedly in June from a 45-month low, climbing to 0.9% in the month from 0.6% in May. The rate was expected to remain unchanged at 0.6%.
According to reports, global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily.
The U.S. is the worst-hit country with over 2.5 million infections, while its death toll exceeds 125,500. New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose lockdowns and other containment measures.