Tuesday's Market Minute: Oil At 7-Week Highs

As more U.S. states are easing pandemic-related lockdowns and some European countries are welcoming fully-vaccinated international travelers, the demand for crude oil is returning. On Tuesday morning, the futures contracts rose to seven-week highs above $65 and are encroaching on the yearly highs of $66.31 made on March 5th. This is up from yearly lows of $22 made last May in which restricted travel, closed offices, restaurants and retail stores kept many Americans out of cars and airplanes. An obvious benefactor of rising oil prices are the large energy companies.

On Friday, both Exxon Mobil XOM and Chevron CVX reported first-quarter results that showed improving upstream earnings thanks to the rise in crude oil prices. Both companies’ executives expressed faith in the trend continuing, however, lingering cases of COVID-19 abroad have impeded the sector from seeing continual gains in the charts. One region of concern is India. The nation had almost 20.3 million COVID cases on Tuesday, according to health ministry data, making it the second country in the world to pass 20 million. On Monday, many stocks related to travel and retail saw gains as investors bet on that growing optimism: Royal Caribbean RCL and American Airlines AAL rose more than one percent each, Gap GPS gained seven percent, and Macy’s M jumped by eight.