The recent bout of price weakness has pushed Brent oil back to near $40, with a resurgence of the coronavirus in some major economies raising concerns about a sustained recovery in consumption. As a result, speculators have shunned the global benchmark, with outright long positions falling to a six-month low last week. All the while, Libyan output rose to about 300,000 barrels a day as the country’s fledgling output recovery continues.

“Oil is bouncing back as risk sentiment is recovering,” said Jens Pedersen, senior analyst at Danske Bank. “Weak fundamentals, in particular in light of rising OPEC+ output amid weak demand, will limit the extent to which oil prices rally.”

Though many of Europe’s biggest economies are still grappling with the virus, the continent’s retail fuel demand is almost back where it was last year, Total CEO Patrick Pouyanne said at a conference. While that may appear positive news for consumption, “refining margins are absolutely terrible,” he said.

The recent weakness in headline prices has also been added to by technical trading companies, known as commodity trading advisers or CTAs. Twelve of fourteen strategies such funds would usually employ are currently short, according to Keith Wildie, a broker at Britannia Global Markets.