Oil prices climbed by more than $1 a barrel on Monday to their highest in more than a month, supported by ongoing output cuts and signs of gradual fuel demand recovery as more countries ease curbs imposed to stop the spread of the coronavirus pandemic.
Brent crude was $1,19, or 3.7 percent, a barrel of 0240 GMT at $33.69, after hitting a high since April 13. U.S. West Texas Intermediate crude has risen to $1.26, or 4.3 percent, a barrel of $30.69, since rising to its highest since March 16. The June WTI contract expires on Tuesday, but there was little indication that WTI was repeating the historic plunge below zero seen last month on the eve of the expiry of the May contract amid indications that demand for crude and related fuels is recovering from its nadir.
Output is also dropping as U.S. energy firms for a second consecutive week cut the number of oil and natural gas rigs operating at an all-time low. That helped partly to alleviate worries about the distribution point of the WTI contract in Cushing, Oklahoma, which runs out of capacity.
The Chicago Mercantile Exchange, which hosts WTI futures trading, brokerages and the United States Oil Fund LP, the country's largest oil-focused exchange-traded stock, have all taken steps to minimize open positions ahead of the expiry of the WTI contract.
As in the U.S., optimistic attitude has been improved. Federal Reserve Chairman Jerome Powell later this year issued an positive forecast for economic recovery. The Organization of Petroleum Exporting Countries ( OPEC) and its partners, including Russia, a coalition known as OPEC+, are also raising the oil prices.
Saudi Arabia, the world's biggest exporter, reported last week that it will cut a further 1 million barrels per day in June, while OPEC+ wants to hold current oil cuts past June when the group is next to meet.
Kuwait and Saudi Arabia have agreed to halt the production of oil from the joint Al-Khafji field for a month, starting on June 1, the newspaper Al Rai reported on Saturday.
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