KIRKLAND, Wash.—Oil prices soared 20% yesterday, the fifth straight day of gains as traders expect demand to recover as lockdowns ease and people begin to travel more, Markets Insider reports.
West Texas Intermediate settled at $24.52 per barrel, while Brent crude rose 14% to settle at $31.02 per barrel.
“Many market participants believe there is light at the end of the tunnel,” UBS analyst Giovanni Staunovo told Market Insider.
“One thing is clear, the demand bottom is behind us, and this is manifesting in oil prices which are on the rise,” Per Magnus Nysveen, Rystad Energy’s head of analysis, told CNBC. The “key reason behind the price strengthening is regional traffic data,” he said.
Americans are getting out on the road more but still not as much as before the COVID-19 pandemic, according to data from Inrix, Oil Price Information Service reports. For the week ended May 1, personal travel in the United States was down 36% compared with a usual week prior to the pandemic’s start.
Personal travel has accelerated every day since April 15, now reaching the levels of March 25. The uptick in vehicle travel corresponded with an increase in fuel sales. Passenger travel rose in all 50 states last week, with every state now experiencing a travel rebound of at least 7%.
Increased travel is showing up in fuel sales. The volume of fuel sold nationally for the week ended May 2 was up 7.46% compared with the prior week, according to preliminary OPIS DemandPro data. Fuel sales were off 35.68% compared with the year-ago week but were sharply higher than in mid-April, when sales were down nearly 50% from 2019 levels.