Oil prices rose by more than $ 1 per barrel on Monday to their highest level in more than a month, which is supported by signs of continued decline in production and the gradual recovery of fuel demand, as more countries relax to contain the coronavirus pandemic Containment measures.
At 0240 GMT, the price of Brent crude oil futures rose by $ 1.19, or 3.7%, to $ 33.69 per barrel, which had previously hit its highest price since April 13. US West Texas Intermediate crude oil futures prices rose by $ 1.26 or 4.3% to $ 30.69 per barrel, after rising to its highest since March 16.
Stephen Innes, chief global market strategist at AxiCorp, said in a report: “With the relaxation of travel restrictions, oil prices may show further upward momentum.”
The June WTI contract expires on Tuesday, but there is little indication that WTI reproduced the historic decline that fell to below zero last month on the eve of the May contract expiration, because there are signs that demand for crude oil and derivative fuels is picking up from the lowest point .
As U.S. energy companies reduced the number of oil and gas rigs operating to their lowest level in history for the second consecutive week, production was also declining. This partly eased concerns about the lack of space at the WTI contract delivery location in Cushing, Oklahoma.
Michael McCarthy, chief market strategist at CMC Markets in Sydney, said: “Especially considering the unexpected surprises we saw in US inventory last week, it seems unlikely to worry about those concerns about storage facilities.
The custody of WTI futures, the Chicago Mercantile Exchange for brokerage operations, and the United States’ largest oil-centric exchange-traded product, the US Petroleum Fund LP (USO.P), have all taken steps to reduce their open positions before the United States. The validity period of the WTI contract.
As Fed Chairman Jerome Powell published an optimistic outlook for economic recovery later this year, optimism has strengthened.
Powell said in a broadcast speech on Sunday evening: “Assuming there is no second coronavirus outbreak, I think you will see a stable economic recovery in the second half of this year.”
The Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, an organization called OPEC +, also cut production, which also supports oil prices.
Saudi Arabia, the world ’s largest exporter, announced last week that it will further cut 1 million barrels per day in June, and OPEC + hopes to keep the existing oil production cut until the next meeting of the group in June.
Kuwait and Saudi Arabia have agreed to shut down oil production at the Al-Khafji joint oil field for one month starting June 1, Kuwait ’s Al Rai newspaper reported on Saturday.