On May 17, WTI crude stabilized from a low of $64.86 and rebounded 2.3% to an intraday high of $66.40, recording two consecutive days of gains and closing above $66.00 for the second time in nearly two weeks. Optimism about the economic recovery in Europe has offset concerns about the surge in COVID-19 cases in Asia and new restrictions. While a new wave of epidemic restrictions in Asia has dampened market confidence, analysts believe the market remains optimistic about the prospect of a recovery in oil demand, which limits further falls in oil prices. The overall optimistic environment in the market is pushing oil prices further upward, with the dollar giving up almost all of its gains last week and falling back to 90.0, while the yield on 10-year Treasuries remained around 1.652%.

"Oil prices have remained relatively stable during the recent volatility, indicating that confidence in the recovery in oil market demand remains unchanged and that unless there is an unpredictable negative scenario, the potential for any downtrend will be limited," said Tamas Varga, an oil analyst at PVM. On Monday, the UK lifted a four-month blockade on the epidemic, further boosting market optimism.

However, investors remain cautious about the spread of a highly contagious coronavirus variant found for the first time in India to other countries, and some Indian states said on Sunday that they would extend the blockade to help control the further spread of the epidemic. Singapore is preparing to close schools this week, while Japan has declared a state of emergency in three other prefectures to contain the epidemic. Commodities broker Fujitomi Co. "Brent crude prices are expected to remain within range this week amid growing concerns about the spread of the epidemic in Asia," said Kazuhiko Saito, chief analyst.

Looking ahead, the outbreaks in India, Japan and Asia have increased uncertainty about the outlook for oil prices, and as the market gradually digests the current positive, further confirmation of a slowdown in demand recovery as a result of the epidemic is expected to trigger long profit-taking. Investors can pay attention to whether crude oil producers take further actions to increase production during the global economic recovery, and whether OPEC+ members can exercise restraint will be a major factor affecting the future of oil prices. On the other hand, the US-Iran nuclear negotiations are still under way, and if necessary, the joint committee meeting of the comprehensive agreement on the Iranian nuclear issue will be held again this week. Finally, there will be minutes of the Fed's monetary policy meeting this week, although recent statements by the Fed and the European Central Bank show that the two sides share the same views on inflation, but if there is more evidence that there is a big divergence of views within the Fed on inflation, it is expected to dampen overall market risk sentiment.

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