Home Energy Oil steady on signs of output cuts

Oil steady on signs of output cuts

A kayaker passes in front of an offshore oil platform in the Guanabara Bay in Niteroi, Brazil, Saturday, Feb. 1, 2020.

Dado Galdieri | Bloomberg | Getty Images

Oil prices rose on Tuesday, extending gains for a fourth straight session, amid signs that producers are cutting output as promised just as demand picks up, stoked by more countries easing out of curbs imposed to counter the coronavirus pandemic.

Brent crude climbed $0.85, or 2.4%, to $35.66 a barrel by 0033 GMT, after touching its highest since April 9.

U.S. West Texas Intermediate crude was up $1.30, or 4.1%, at $33.12 a barrel, after hitting its highest since March 16.

The June WTI contract expires on Tuesday, but there was little sign of a repeat of the historic plunge below zero seen a month ago on the eve of the May contract’s expiry amid signs that demand for crude and derived fuels is recovering from its nadir.

The market was also boosted by signs that output cuts agreed by the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, a group known as OPEC+, are being implemented on the ground.

OPEC+ has cut its oil exports sharply in the first half of May, companies that track the shipments said, suggesting a strong start in complying with a new production cut agreement.

“Investors’ sentiment has improved as OPEC+ are apparently slashing output as they promised for this month, with more voluntary cuts expected in June,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“At the same time, there is growing optimism that the easing of global (coronavirus) lockdowns will help boost economic activity and fuel demand,” he said, predicting the U.S. crude benchmark could rise to $35 a barrel.

In further support for prices, U.S. production is also falling, with crude output from seven major shale formations expected to fall by a record 197,000 barrels per day in June to 7.822 million barrels per day. That would be the lowest since August 2018, according to the U.S. Energy Information Administration.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

Astronauts conduct second Chinese space station spacewalk

HELSINKI — Chinese astronauts Nie Haisheng and Liu Boming embarked on a second Shenzhou-12 spacewalk late Thursday to carry out work on a space...

Space Force awards $32 million in contracts to startups and small businesses

Of 24 companies that competed at the Space Force Pitch Day, 19 were selected for SBIR Phase 2 awards WASHINGTON — At a virtual...

PNT alternatives champion open-market approach

TAMPA, Fla. — Competing positioning, navigation, and timing (PNT) companies are joining forces to accelerate efforts to back up global navigation satellite systems (GNSS). The...

Space Force to establish new command in Colorado focused on training and education

STARCOM is the third and final field command being stood up by the Space Force WASHINGTON — The U.S. Space Force on Aug. 23 will...

Single molecules keep to the straight and narrow – Physics World

Precisely sending and receiving single molecules. Courtesy: L Grill A change in the position of a single molecule can determine the outcome of a chemical...