AIRLINK 72.59 Increased By ▲ 3.39 (4.9%)
BOP 4.99 Increased By ▲ 0.09 (1.84%)
CNERGY 4.29 Increased By ▲ 0.03 (0.7%)
DFML 31.71 Increased By ▲ 0.46 (1.47%)
DGKC 80.90 Increased By ▲ 3.65 (4.72%)
FCCL 21.42 Increased By ▲ 1.42 (7.1%)
FFBL 35.19 Increased By ▲ 0.19 (0.54%)
FFL 9.33 Increased By ▲ 0.21 (2.3%)
GGL 9.82 Increased By ▲ 0.02 (0.2%)
HBL 112.40 Decreased By ▼ -0.36 (-0.32%)
HUBC 136.50 Increased By ▲ 3.46 (2.6%)
HUMNL 7.14 Increased By ▲ 0.19 (2.73%)
KEL 4.35 Increased By ▲ 0.12 (2.84%)
KOSM 4.35 Increased By ▲ 0.10 (2.35%)
MLCF 37.67 Increased By ▲ 1.07 (2.92%)
OGDC 137.75 Increased By ▲ 4.88 (3.67%)
PAEL 23.41 Increased By ▲ 0.77 (3.4%)
PIAA 24.55 Increased By ▲ 0.35 (1.45%)
PIBTL 6.63 Increased By ▲ 0.17 (2.63%)
PPL 125.05 Increased By ▲ 8.75 (7.52%)
PRL 26.99 Increased By ▲ 1.09 (4.21%)
PTC 13.32 Increased By ▲ 0.24 (1.83%)
SEARL 52.70 Increased By ▲ 0.70 (1.35%)
SNGP 70.80 Increased By ▲ 3.20 (4.73%)
SSGC 10.54 No Change ▼ 0.00 (0%)
TELE 8.33 Increased By ▲ 0.05 (0.6%)
TPLP 10.95 Increased By ▲ 0.15 (1.39%)
TRG 60.60 Increased By ▲ 1.31 (2.21%)
UNITY 25.10 Decreased By ▼ -0.03 (-0.12%)
WTL 1.28 Increased By ▲ 0.01 (0.79%)
BR100 7,566 Increased By 157.7 (2.13%)
BR30 24,786 Increased By 749.4 (3.12%)
KSE100 71,902 Increased By 1235.2 (1.75%)
KSE30 23,595 Increased By 371 (1.6%)
Markets

Brent at one-month high, US oil tops $32 as lockdowns ease

June WTI contract hits 9-week high before Tuesday's expiry No sign of price plunge seen at last expiry Sa
Published May 18, 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 for a month –media

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

Brent crude was up $2.32, or 7.1%, at $34.82 a barrel by 1344 GMT, its highest level since mid-April.

US West Texas Intermediate (WTI) crude was up $3.35 or almost 11.4% at $32.78 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 were reopening in Italy on Monday, while other centres of the outbreak such as New York and Spain will gradually lift restrictions.

The June WTI contract expires on Tuesday, but there was little indication of a repeat of last month's historic plunge below zero 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 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.

In another sign of efforts to reopen economy, the US auto industry slowly returned to life on Monday, with some vehicle assembly plants reopening after the coronavirus lockdown, while suppliers geared up to support a sector that employs nearly 1 million people.

 

Comments

Comments are closed.