Brent at highest since March on U.S. stock draw, recovering demand

By Laura Sanicola NEW YORK (Reuters) - Global benchmark Brent rose more than 1% on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease coronavirus restrictions on people's movements.

Reuters May 22, 2020 01:06:45 IST
Brent at highest since March on U.S. stock draw, recovering demand

Brent at highest since March on US stock draw recovering demand

By Laura Sanicola

NEW YORK (Reuters) - Global benchmark Brent rose more than 1% on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease coronavirus restrictions on people's movements.

Oil has slumped in 2020, with Brent hitting a 21-year low below $16 a barrel in April as demand collapsed. With fuel use rising and more signs that the supply glut is being tackled, Brent has since more than doubled.

Brent rose 34 cents, or 1%, to settle at $36.09 per barrel. U.S. West Texas Intermediate crude closed up 43 cents, or 1.28%, to $33.92.

In the latest sign the supply glut is easing, U.S. crude inventories fell 5 million barrels last week. Analysts had expected an increase. [EIA/S]

"The rally in the crude futures is beginning to approach levels in which U.S. shale production declines will begin to slow and possibly reverse as low cost producers attempt to generate revenue," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

At the same time, there is evidence of recovering fuel use.

Top U.S. airlines and Air Canada on Tuesday reported slower ticket cancellations and an improvement in bookings on some routes, though executives said overall demand remained weak.

However, data from the U.S. Labor Department on Thursday revealed another 2.4 million Americans filed for unemployment last week, which will affect gasoline demand, according to John Kilduff, partner at Again Capital LLC in New York.

"We're seeing gains consolidate somewhat after another week of bad economic data in the United States," said Kilduff.

The Organization of the Petroleum Exporting Countries, Russia and other allies, known as OPEC+, agreed to cut supply by a record 9.7 million barrels per day from May 1.

So far in May, OPEC+ has cut oil exports by about 6 million bpd, according to companies that track the flows, suggesting a strong start in complying with the deal. OPEC says the market has responded well.

(Additional reporting by Alex Lawler and Yuka Obayashi; Editing by Marguerita Choy and Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.