Oil prices rose the most in two weeks after US stockpiles declined, but Brent still went off the board -6 % last month.

Painting a much more flattering picture of US oil demand than was expected, there were some unexpected strong numbers in the weekly oil data report as Crude draw against consensus.

And while I would much prefer to defer to a lengthier time series of EIA inventory data to “draw” conclusions from, nonetheless, the latest report paints a much less gloomy picture of oil demand than oil specialists suspected.

There is a vocal chorus of energy traders coming to grips that price recovery will be a lengthy process of stops and starts while discovering that elusive continuous trend will be problematic when navigating through the Covid-19 haze.

That is merely a fact of life for oil traders these days as the market continues to trade in a slightly wider than usual intraday range-bound fashion.

Of course, that view will give way when the coronavirus case count curve flattens below acceptable healthcare standards.

Look, we have been down this road before, and we all know the new game show prize, but it will be a lengthy period before an 70 % effective vaccine is available.

Hopefully, the multiple virus suppressors currently in the pipeline will be able to raise herd immunity above 90 %, and folks can start travelling again.

It’s hard to see a scenario in the near-term where travel gets back to pre-pandemic levels, and even with a vaccine in the pipeline (several of them, actually), there are genuine concerns that “normal” as we knew it before February, isn’t coming back any time soon.

Global risk appetite, to which oil prices remain very much tethered, is benefiting from positive noises around a stimulus deal from Washington DC.

Substantial compliance from OPEC+ on cuts and limited upside for US production should keep supply below demand in the foreseeable future – Axi forecasts a ~3mb/d deficit both for 4Q20 and FY21.

Hopefully, this should help global inventories move in the right direction, but the sentiment will remain sensitive to news flow (as per the New York City scare) on the coronavirus and the outlook for the global economy (as per the US Federal Reserve).

Oil markets analysis and insights from Stephen Innes, Chief Global Market Strategist at Axi