Crude oil futures extended gains to a fifth straight session as prices rose sharply on Tuesday amid slightly easing worries about energy demand after several countries eased shutdown restrictions.
Another positive trigger for oil today was the production cuts several major crude producers have started implementing since the beginning of this month.
The decision of OPEC and its oil-producing allies to cut output by 9.7 million barrels per day, went into effect on May 1. Norway and Canada have also reportedly cut down production significantly.
West Texas Intermediate Crude oil futures for June ended up $4.17, or 20.5%, at $24.56 a barrel, the highest settlement in more than two weeks.
This is the first time in the past nine months that WTI crude futures have gained for five successive sessions.
Brent crude futures moved up nearly 14% to $30.97 a barrel.
U.S. President Donald Trump tweeted this morning, “Oil prices moving up nicely as demand begins again!”
Italy finally eased lockdown restrictions with strict guidelines after two months. The country has allowed 4.5 million people to return to work but not without masks and gloves. Restaurants, parks and public transports have been re-opened too.
Spain continues to be in a state of lockdown, but easing of restrictions have been announced across the country.
California Gov. Gavin Newsom said some businesses will reopen as early as Friday, with conditions. Andrew Cuomo of New York has outlined a phased reopening in the U.S. state hardest hit by the Covid-19 pandemic.
India started reopening its factories after spending more than a month in strict lockdown. Hong Kong may soon reopen cinemas and gyms.
Following reopening of businesses in several parts of the world, it is expected that there will be significant recovery in vehicle traffic and fuel demand. Swiss bank UBS said the easing of restrictions would help lead to a balance in supply and demand for the oil market in the third quarter.
The material has been provided by InstaForex Company – www.instaforex.com