Oil Price at Highest Since March

Alex Lawler
Thursday, May 21, 2020

Oil rose on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease restrictions on people's movements imposed due to the coronavirus crisis.

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

Brent crude for July rose 42 cents, or 1.2%, at $36.17 per barrel at 0840 GMT.

U.S. West Texas Intermediate crude climbed 40 cents, or 1.2%, to $33.89. Both benchmarks are at their highest since March 11.

"With supply being managed through the compliance among OPEC+ and demand recovering in North Asia, particularly in China, things are moving in the right direction in terms of supporting oil prices," said Victor Shum of IHS Markit.

In the latest sign of a supply glut easing, U.S. crude inventories fell by 5 million barrels last week. Analysts had expected an increase.

Physical crude markets, at historic lows just weeks ago as demand collapsed, are also rebounding. In the Brent market, the structure is pointing to supplies becoming more constrained.

"It is now abundantly clear that the market is tightening and crude prices are rebounding as demand returns," said analysts at JBC Energy.

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 (bpd) from May 1 to support the market.

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; editing by Jason Neely)

Categories: Energy Activity Production Oil Price

Related Stories

CNOOC Kicks Off Production from Bohai Bay Field

Eni Strengthens LNG Ties with Japan

Nong Yao C Development Bolsters Valeura’s Production Rates Off Thailand

PTTEP Sells Its Entire Stake in Deepwater Block Offshore Mexico to Repsol

Korea's Hanhwa Sets Out Plan for Full Takeover of Singapore's Dyna-Mac

CNOOC Brings Online Another South China Sea Field

Heat Drives Asian LNG Spot Price Spike

Key China Energy Indicators to Track for the Rest of 2024

China’s CNOOC Hits ‘High Yield’ Well in in Beibu Gulf

CNOOC’s Ultra-Deep Well in Bohai Bay Outperforms Target

Current News

Malaysia's FPSO Firm Bumi Armada Eyes Merger with MISC’s Offshore Unit

Global OTEC Presents OTEC Power Module for Remote Offshore Platforms

Beam’s AI-Driven AUV to Hit Offshore Wind Market in 2025

CRC Evans Secures Work at Qatar’s Largest Offshore Oil Field

Blackford Dolphin Kicks Off Long-Term Drilling Campaign Offshore India

India Defends Propping Up Russian Oil - Prices "would have hit the roof"

Valeura Energy Consolidates Thai Oil and Gas Assets

TotalEnergies Inks 15-Year LNG Supply Deal with China’s Sinopec

Shelf Drilling Secures $200M Contract Extensions with Chevron for Thailand Ops

Floating Wind and the Taming of Subsea Spaghetti

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com