Oil prolonged gains Thursday amid signs that producers are redy=ucing output to cope with a plunge in demand for fuel as the coronavirus outbreak ravages the world’s economies.
Brent crude was up 1.6% (33 cents) at $20.70/barrel after rising over 5% Wednesday.
U.S. West Texas Intermediate (WTI) futures had been up over 2% (28 cents) at $14.06/barrel, having risen around a fifth in the earlier session. U.S. crude futures dropped to below minus $40 Monday on issues that buyers had been running out of storage space to take deliveries.
In the U.S., the world’s largest oil producer, Oklahoma’s energy watchdog, stated firms could shut wells without losing their leases, a preliminary win for struggling U.S. producers seeking reduction from the market crash after a spike in output. The state is the fourth-largest oil producer within the U.S.
As oil demand plummets, the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a gaggle often known as OPEC+, are set to chop provide by a record 9.7 million barrels per day (BPD) from May 1. Those cuts might have to be extended to match the shortfall in demand, analysts said.
Loadings of Russia’s Urals crude grade from the Baltic Sea in the first ten days of May are set to be 36% lower than the same interval in April, indicating the nation is complying with the reductions.