Oil Climbs as Coronavirus Curbs Ease
Oil prices gained on Friday as more countries began relaxing restrictions put in place to halt the coronavirus pandemic, raising hopes that demand for crude and its products will start to pick up.
Brent crude was up by 42 cents, or 1.4%, at $29.88 a barrel, having fallen nearly 1% on Thursday. US oil gained 45 cents, or 1.9%, to $24.00 a barrel, after a decline of nearly 2% in the previous session, CNBC reported.
Both contracts are heading for a second week of gains after the lows of April, when US oil crashed below zero, with Brent up around 13% and WTI about 21% higher.
However, crude is still being pumped into storage, raising the prospect that any gains prompted by stronger demand will be capped.
“Oil is rallying on expectations of better demand. There are green shoots there but I think the market will need to see those broaden and extend to sustain the rally,” said Lachlan Shaw, head of commodities research at National Australia Bank in Melbourne.
On the supply side, North American oil companies are cutting production quicker than OPEC officials and industry analysts expected and are on track to withdraw about 1.7 million barrels per day of output by the end of June.
“The supply cuts we have seen announced, particularly in North America, are also giving the market confidence,” Shaw said.
Still, US crude inventories at the Cushing storage hub in Oklahoma increased by around 407,000 barrels in the week through May 5, traders said, citing Genscape data.
source: Financial Tribune
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