On Monday, oil prices went up by more than USD1/barrel to the highest level in more than a month. The ongoing output cuts by major oil producers and signs of recovering demand due to the easing coronavirus restrictions attributed to the rise.
Brent crude oil benchmark rose by 3.3% or USD1.06 to USD33.56/barrel at 04.52 GMT. US WTI jumped by 4.4% or USD1.29 to USD30.72/barrel.
As coronavirus-related restrictions around the world ease, oil prices saw a momentum of demand growth. US energy company also cut operating oil and natural gas rigs to a record low for the second week in a row, which partly relieved the worry on the WTI contract’s delivery point in Cushing, Oklahoma, running out of space.
The positive mood was also supported by US Federal Reserve’s Chairman Jerome Powell’s optimistic outlook for the economic recovery later in 2020. His optimistic view was based on the assumption that there would not be a second wave of the coronavirus.
“I think you will see the economy recover steadily through the second half of this year,” Powell said Sunday night.
The oil supply cut from the world’s biggest producers in OPEC+, being topped by Saudi Arabia and Kuwait’s agreement to stop oil production from their joint Al Khafji oil field for a month, also provides support for the prices.
The June WTI contract is to expire on Tuesday. However, there was still an indication of WTI reexperiencing the historic slump under zero in the eve of May contract’s expiry even when demands for crude and derived fuels seem to be recovering.
