A booming rally in oil markets has pushed crude prices to their highest levels since near the start of the coronavirus pandemic, powered by production curbs and recovering demand.
Brent-crude futures, the benchmark in energy markets, have risen more than 50% since the end of October and are approaching $60 a barrel for the first time since Covid-19 began to erode oil demand in early 2020. Futures for West Texas Intermediate—or WTI, the main grade of U.S. crude—last week surpassed $55 a barrel for the first time in over a year.
The speed of the recovery has surprised some investors and analysts, given that coronavirus continues to curtail demand. It has juiced shares of companies including Exxon Mobil Corp . and ConocoPhillips after a troubled 2020 for oil-and-gas producers, making energy stocks the best performers on the S&P 500 this year.
“The market definitely has some momentum,” said John Kilduff, partner at Again Capital LLC, a hedge fund that invests in energy derivatives. “WTI is going to be targeting $60, too.”
Oil is rising against a mixed economic backdrop, with data published Friday suggesting that the labor market faces a long road to recovery. But the stock market continues to power higher, in part because investors expect a new dose of fiscal stimulus and vaccines to goose growth.