Brent, WTI Climb as Global Market Outlook Improves
Oil rose as Saudi Aramco slashed its sales to key buyers and the IEA said that the market is showing signs of improving.
Futures in New York added as much as 4.4%. Saudi Aramco cut sales to the US and Europe by about half and reduced supplies to at least 12 customers in Asia for June as OPEC and its allies curb daily output by almost 10 million barrels.
The International Energy Agency said the outlook for global oil markets has improved as demand firms, Reuters reported.
In a sign that output cuts are starting to take hold, key gauges of market strength are rallying.
Brent crude was up 39 cents, or 1.3% at $31.52 a barrel on Friday. West Texas Intermediate oil was up 19 cents, or 0.7%, at $27.75 a barrel.
The price difference between Brent’s two nearest contracts have reached their narrowest in almost two months, signaling the oversupply is reducing.
Dated Brent, which prices more than two-thirds of the world’s oil, was assessed by S&P Global Platts at $29 a barrel on Thursday, up almost $10 from a month ago.
Oil has swung between gains and losses this week as the market grapples with a nascent recovery in demand and concerns a resurgence of coronavirus cases could derail an economic rebound.
While the IEA joined Saudi Arabia and Russia in seeing signs of consumption improving, the market is still having to recover from an unprecedented rout that has seen about a billion barrels worth of storage build up.
source: Financial Tribune
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