Meanwhile, Kemp says hedge fund managers are "bullish" on oil: File Image/Pixabay
A source familiar with Russia's thinking told media on Monday that the former Soviet Union will support stable oil output by the Organization of the Petroleum Exporting Countries (OPEC) in May, and this was enough to keep the Covid fears of crude traders at bay and give oil prices a modest boost.
The gains were augmented by another source stating that Saudi Arabia will support extending oil cuts into May and June and is prepared to extend its own voluntary cuts to keep the market steady, as governments in Europe enact a new round of Covid lockdowns.
Oil was also supported by the Ever Given being pulled by tug slowly to the center of the Suez Canal; it was previously feared that the blockage caused by the container ship would take weeks to clear.
Phil Streible, chief market strategist, Blue Line Futures
Oil has done a really good job of shrugging off last week's selloff
Brent rose 26 cents to $64.83 per barrel by 1:08 p.m. EDT (1708 GMT); West Texas Intermediate rose 47 cents to $61.44 per barrel.
With regards to the recent crude sell offs, John Kemp, commodities analyst at Reuters, pointed out that purely from a technical perspective, "with so many funds having already placed a bullish bet on the direction of oil prices, and few short positions left to be covered, the market had become vulnerable to any setback."
He added that although fund managers sold petroleum last week at the fastest rate since November, "the hedge fund community is still very bullish towards oil, with a net position of 824 million barrels (76th percentile) and long/short ratio of 4.75 (66th percentile), just slightly more cautious than a few weeks ago."
An upbeat Phil Streible, chief market strategist at Blue Line Futures, remarked, "Oil has done a really good job of shrugging off last week's selloff, and hopefully can have a run back up to recent contract highs."
Indeed, oil is set to close out a fourth consecutive quarterly gain this week, bolstered by optimism that–Europe's shaky rollout notwithstanding–the successful Covid vaccination programs in the U.S., the U.K. and other countries will soon expand global demand (foot traffic in U.S. airports reportedly rose to nearly 1.6 million on Sunday at the highest since the pandemic started).