ANL 34.00 Increased By ▲ 0.90 (2.72%)
ASC 14.90 Increased By ▲ 0.55 (3.83%)
ASL 25.10 Increased By ▲ 0.62 (2.53%)
AVN 92.20 Decreased By ▼ -0.30 (-0.32%)
BOP 9.14 Increased By ▲ 0.08 (0.88%)
BYCO 9.85 Increased By ▲ 0.15 (1.55%)
DGKC 134.70 Increased By ▲ 2.51 (1.9%)
EPCL 50.62 Increased By ▲ 0.52 (1.04%)
FCCL 24.63 Increased By ▲ 0.33 (1.36%)
FFBL 25.86 Increased By ▲ 1.46 (5.98%)
FFL 15.49 Increased By ▲ 0.47 (3.13%)
HASCOL 10.56 No Change ▼ 0.00 (0%)
HUBC 86.33 Increased By ▲ 1.23 (1.45%)
HUMNL 7.02 Increased By ▲ 0.27 (4%)
JSCL 25.65 Increased By ▲ 0.40 (1.58%)
KAPCO 41.55 Increased By ▲ 2.80 (7.23%)
KEL 4.02 Increased By ▲ 0.04 (1.01%)
LOTCHEM 14.45 Increased By ▲ 0.02 (0.14%)
MLCF 46.42 Increased By ▲ 0.54 (1.18%)
PAEL 37.25 Increased By ▲ 0.55 (1.5%)
PIBTL 11.70 Increased By ▲ 0.27 (2.36%)
POWER 10.25 Increased By ▲ 0.10 (0.99%)
PPL 90.90 Increased By ▲ 1.20 (1.34%)
PRL 26.86 Increased By ▲ 0.61 (2.32%)
PTC 8.71 Increased By ▲ 0.11 (1.28%)
SILK 1.35 No Change ▼ 0.00 (0%)
SNGP 42.71 Increased By ▲ 1.31 (3.16%)
TRG 146.10 Increased By ▲ 3.00 (2.1%)
UNITY 30.20 Increased By ▲ 0.41 (1.38%)
WTL 1.41 Decreased By ▼ -0.01 (-0.7%)
BR100 4,965 Increased By ▲ 76.98 (1.57%)
BR30 25,754 Increased By ▲ 477.72 (1.89%)
KSE100 45,837 Increased By ▲ 558.82 (1.23%)
KSE30 19,174 Increased By ▲ 275.54 (1.46%)
Markets

Brent at one-month high, US oil tops $31 as restrictions ease

June WTI contract hits 9-week high before Tuesday's expiry No sign of price plunge seen at last expiry Sa
18 May 2020
  • June WTI contract hits 9-week high before Tuesday's expiry
  • No sign of price plunge seen at last expiry
  • Saudi, Kuwait to shut joint field in June –media

LONDON: Oil prices climbed by $2 a barrel on Monday, with benchmark Brent hitting a one-month high and US crude topping $30 supported by optimism about the re-opening of economies and output cuts by major producers.

Brent crude was up $1.99, or 6.1%, at $34.49 a barrel by 1041 GMT, its highest level since mid-April.

US West Texas Intermediate (WTI) crude was up $2.46 or 8.4% at $31.89 per barrel, its highest since mid-March.

"Optimism on the demand side of the oil equation has helped prices climb further, with gasoline demand coming back as governments ease confinement measures," said Rystad Energy's senior oil markets analyst Paola Rodriguez Masiu.

Summer weather is enticing much of the world to emerge from coronavirus lockdowns. Shops and restaurants prepared to reopen in Italy on Monday, while other centres of the outbreak such as New York and Spain gradually lifted restrictions.

The June WTI contract expires on Tuesday, but there was little indication of it repeating a historic plunge below zero last month on the eve of the May contract's expiry.

However, analysts cautioned that demand was not expected to recover to pre-coronavirus levels any time soon.

"Clearly the fundamentals in the market are improving, but we continue to believe that the market is rallying too much too soon, with the risk that further strength will only prolong the supply and demand imbalance," ING analyst Warren Patterson said.

Also supporting oil prices are production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, a grouping known as OPEC+.

The world's top exporter Saudi Arabia announced last week that it would cut an additional 1 million barrels per day in June, while OPEC+ wants to maintain existing oil cuts beyond June when the group meets next.

Kuwait and Saudi Arabia have agreed to halt oil production from the joint Al-Khafji field for one month, starting from June 1, Kuwait's Al Rai newspaper reported on Saturday.

Production is also falling as US energy firms cut the number of oil and natural gas rigs operating.

"Thanks to the additional production cuts by Saudi Arabia, the United Arab Emirates and Kuwait and the more rapid decline in oil production in North America, the oil market could reach equilibrium as early as June," said Commerzbank analyst Carsten Fritsch.