Oil Heads for Another Weekly Gain on Demand Hopes and Shut-Ins
LONDON—Oil prices rose on May 8 and were on course for a second consecutive week of gains as more co..
LONDON—Oil prices rose on May 8 and were on course for a second consecutive week of gains as more countries moved ahead with plans to relax economic and social lockdowns put in place to halt the CCP virus pandemic and as more output was shut in.
Brent crude was up by 52 cents, or 1.8 percent, at $29.98 a barrel by 0920 GMT, having fallen nearly 1 percent on Thursday.
U.S. West Texas Intermediate (WTI) crude gained 78 cents, or 3.3 percent, to $24.33 after a decline of nearly 2 percent in the previous session.
Both contracts are heading for a second week of gains after the lows of April, when U.S. oil crashed below zero, with Brent advancing more than 13 percent this week and WTI up 23 percent.
However, crude is still being pumped into storage, raising the prospect that any gains prompted by stronger demand will be capped.
“The market remains very oversupplied, but OPEC+ cuts and voluntary curtailments are helping and the modest beginnings of demand recovery could be imminent as lockdowns begin to ease,” said Jefferies equity analyst Jason Gammel.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group know as OPEC+, began implementing a deal on record supply cuts amounting to 9.7 million barrels per day (bpd) from the start of May.
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 bpd of output by the end of June.
Still, U.S. crude inventories at the Cushing storage hub in Oklahoma increased by about 407,000 barrels in the week through May 5, traders said on Thursday, citing Genscape data.
“Price-wise, we still expect to see some mild (if not wild) price swings as the traders get bullish on shut-ins and thenRead More – Source
