Oil jumps 7% as investors see 'light at the end of the tunnel' with coronavirus lockdowns slowly lifting

• Oil prices rose on Tuesday as traders looked optimistically at moves by several major economies to ease coronavirus lockdowns, allowing greater economic activity, and likely boosting demand for oil.
• The price of West Texas Intermediate is up almost 7% above $22 per barrel as of 8.35 a.m ET.
• Giovanni Staunovo, analyst at UBS, said: "Many market participants believe there is light at the end of the tunnel."
• Concerns still persist, however, about oil's future price movements, as storage issues remain for US oil.
• Follow the price of oil live with Markets Insider.

Oil prices rose on Tuesday as traders looked optimistically at moves by several major economies to ease coronavirus lockdowns, allowing greater economic activity, and likely boosting demand for oil.

The price of West Texas Intermediate rose close to 7% to $22.64 per barrel as of 8.35 a.m ET. Brent, the international benchmark, also rose, up 4.4% to $29.21 per barrel, according to Markets Insider data.

"Many market participants believe there is light at the end of the tunnel." Giovanni Staunovo, an analyst at UBS, said

Naeem Aslam, chief market analyst at Avatrade said oil prices are higher "as the world returns to its new normal."

Italy, France and Spain among the countries that are easing lockdowns or setting dates to do so. These countries had some faced some of the world's most stringent lockdown measures, which have been ongoing since mid-March.

Several US states are also moving to ease their lockdowns, with non-essential businesses and beaches reopening in some parts of the country.

Aslam said: "All of this optimism has helped the oil prices to record the longest run of daily gains in more than nine months. This further strengthens the argument that the worst may be over for oil, and given the fact that the oil producers have started to curtail voluntary and involuntary supply cuts, the supply and demand curve may reverse its course.

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But Aslam added that the June contract for WTI is "still prone to risk" because both a glut of oil and a lack of storage space for it persist.

The suggestion that the easing of lockdowns is supporting oil prices even though worries over storage continue was echoed by other analysts.

UBS' Staunovo cautioned: "While the inflection point appears near, we would describe the current environment as the darkest hour just before the dawn. With oil inventories still increasing, crude oil prices remain vulnerable to renewed setbacks."

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Neil Wilson, chief market analyst at Markets.com, said: "Oil continues to make steady gains with front month WTI to $22 on hopes lockdowns are being lifted. The idea that we will be moving around anything like as much as before is fanciful, at least in the near term."

US oil prices turned negative for the first time in history two weeks ago as a cocktail of a lack of storage options —particularly at a key storage facility in Cushing, Oklahoma — and the reduction in demand for the commodity pushed prices below zero for the first time ever.