WASHINGTON (DTN) -- Nearest-delivery West Texas Intermediate futures and Brent crude on Intercontinental Exchange extended gains into fifth and sixth consecutive sessions Tuesday, respectively, with investors riding the bullish sentiment in the equity markets as major economies continue to move towards gradual easing of lockdowns and social distancing restrictions that have suffocated economic growth and fuel demand.
In early trading, NYMEX June WTI futures rallied $2 or 10% to $22.35 per barrel (bbl) and the international Brent crude benchmark July contract advanced $2 to $29.30 bbl. NYMEX June ULSD futures surged 5.65 cents to $0.8596 gallon and NYMEX June RBOB futures rallied 4.16 cents to near $0.8631, trading near a $0.8685 eight-week high on the spot continuous chart.
Investors have increased their bullish bets on a view the worst of the coronavirus-triggered lockdowns are over, with Asia, eurozone and the United States moving towards reopening their economies.
Goldman Sachs forecasts the global economy likely bottomed out in April and is now on a slow path towards recovery. Economists with the investment bank project global annualized gross domestic product is expected to contract 32% in the second quarter before accelerating to a 16% annualized growth rate in the third quarter and 13% expansion in the fourth quarter.
"We expect GDP to grow as businesses and households learn to combine higher economic activity with continued virus control via a range of adjustment mechanisms including mask and glove wearing, frequent cleanings of workplaces, lower office and retail occupancy, and improved testing and contact tracing," said Goldman Sachs.
In the United States, 22 states are set to lift "stay-at-home" orders over the next 10 days, with similar moves having been announced in India, Thailand, France, Germany, and the United Kingdom. Italy and Spain, two of the hardest hit nations by the global pandemic, announced the reopening of some small businesses and construction sites.
Global traffic data provides additional evidence people are reemerging from lockdowns and taking to the roads. Apple Maps Tracker reported mobility index in the United States has now climbed over 40% from its mid-April slump, while still down roughly 60% from its 2020 peak.
Oil complex is also buoyed on hopes voluntary and government-enforced production shut-ins will shrink global oil inventories in the coming months. Reuters reported oil majors, including British Petroleum and ExxonMobil, are set to cut output by at least 12% in the second quarter to the lowest production rate in 17 years.
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