Oil was up 2 per cent overnight on tighter crude supplies from major producers and as coronavirus lockdowns kept easing despite a record rise in cases globally.
Brent crude settled at $US43.08 a barrel, up 89 US cents, or 2.1 per cent. The West Texas Intermediate (WTI) crude contract for August, the day’s more-active contract, settled at $US40.73 a barrel, rising 90 US cents, or 2.3 per cent.
Prices got a boost from a plummeting US and Canadian oil rig count, an indicator of future supply, which fell to a new low last week, said Andy Lipow, president of consultants Lipow Oil Associates.
The reopening of US states and countries around the world following business closures and stay-at-home orders caused by the novel coronavirus, also helped oil rally, said Gene McGillian, vice president of market research at Tradition Energy.
“Even though there seems to be more worries about COVID, the market continues to move higher on the expectations that things are getting back to normal,” McGillian said.
Both Brent and US contracts rose about 9 per cent last week, supported by a recovery in fuel demand as lockdowns eased and economic activity resumed.
The prospect of greater compliance by OPEC and allies, a group known as OPEC+, with coordinated production cuts to balance the market, also supported oil.
OPEC+ has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) into a fourth month, so it runs to the end of August.
Ballooning virus cases in the United States and elsewhere kept prices from moving higher.
South Korea said on Monday for the first time that it was in the midst of a second wave of the coronavirus. The World Health Organisation reported a record rise in global cases on Sunday, with the biggest gains from North and South America.