After posting its worst quarter on record, oil’s now headed for its best three months in 30 years as it bounces back from this year’s historic crash. Yet the rebound remains tenuous.

Futures in New York have almost doubled in value this quarter, buoyed by OPEC+ production cuts and rebounding oil consumption in post-lockdown China. The market’s climb from negative territory in April has been swift but bumpy, with the U.S. benchmark struggling to hold above $40 a barrel amid a stubborn supply glut and a resurgence of Covid-19 cases that’s darkened the demand outlook.

“It’s not going to jump back up to $60 overnight, but to get to where we are now from where we were at is an incredible story,” said Phil Flynn, an analyst at Price Futures Group Inc. How quickly the market can complete its recovery is an open question. “Coming out of the rut will have to happen one day at a time,” he said.

While demand is gradually improving, it’s still a long way off pre-crisis levels. In the U.S., a spike in virus cases is prompting many states to pause or reverse re-openings, which could curb summer travel just as fuel consumption was beginning to ramp up. Across the Atlantic, European Union governments extended a travel ban for U.S. residents.

Rising American inventories are also weighing on prices, which are still 35% down from last year. Crude stockpiles have expanded for the last three weeks to the highest level on record while diesel supplies have swelled for 11 of the last 12 weeks. Government data to be released on Wednesday will reveal whether the situation is worsening.

“It could be a slaughter,” said Robert Yawger, director of the futures division at Mizuho Securities USA. “We could have three records tomorrow in gasoline, distillate and crude oil at all-time record storage levels.”

In yet another threat to the market recovery, rising prices have prompted some U.S. producers to restart wells they shuttered after the crash. ConocoPhillips is the last to announce it will restore some curtailed production next month.

Prices:

• WTI for August delivery fell 7 cents to $39.63 a barrel as of 12:12 p.m. in New York
• The contract is up almost 12% for the month
• Brent for August, which expires Tuesday, dropped 52 cents to $41.19.
• It’s up 18% for the month and 83% for the quarter
• The more active September contract declined 23 cents to $41.62

While increasing U.S. output complicates OPEC+’s goal of balancing the market, the producer alliance has made good on its historic pledge to cut production but almost 10 million barrels a day. Saudi Arabia and Russia have both slashed exports to multi-year lows, supporting physical prices in some parts of the world.

In another bright spot for the oil market, China’s recovery is continuing with manufacturing data for June beating estimates, pointing to stronger demand from the world’s largest consumer.

“The worst is behind us,” Amin Nasser, chief executive officer of Saudi Aramco, said in an interview with consultant IHS Markit. “I’m very optimistic about the second half of this year. We see it in China today, it’s almost at 90%.”

Other oil-market news:

• Russia, often a laggard in previous OPEC+ agreements, came close to its output target this month as the alliance demanded every member’s full compliance with the historic deal.
• Shell will write down between $15 billion and $22 billion in the second quarter, as the company gave investors a wider glimpse of just how severely the coronavirus crisis has hit Big Oil.
• Saudi Arabia, de facto leader of the OPEC cartel, held a call with fellow member Nigeria as the organization strives to deliver production cuts aimed at bolstering global crude markets.

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