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World Oil Prices Continue Strengthen After Lockdown Easing

Crude oil prices rose with the easing lockdown in some countries due to the coronavirus pandemic. Thus, the demand for fuel keep raising

Quoting Antara, Monday (18/5), West Texas Intermediate (WTI) crude oil for June delivery rose US $ 1.87 or 6.8 percent to US $ 29.43 per barrel. WTI had penetrated the US $ 29.92 in the trading session which was the highest position since mid-March.

Meanwhile, Brent crude for July delivery rose US $ 1.37 or 4.4 percent to US $ 32.50 per barrel. Over the past week, WTI oil jumped 19.7 percent and Brent crude rose 5.2 percent.

However, the market remains cautious because the corona pandemic is far from over. On the other hand, new infection clusters have emerged in several countries that have loosened lockdowns. 

"Oil prices have risen significantly since yesterday thanks to a better assessment of the situation by the International Energy Agency (IEA)," Commerzbank said in a note. The IEA estimates global crude oil inventories to fall by around 5.5 million barrels per day (bpd) in the second half of 2020. On an annual basis, the IEA predicts oil demand will drop 8.6 million bpd. However, the decline was 690 thousand bpd smaller than predicted last month. In addition, the US Energy Information Agency said their crude oil inventories fell suddenly or unexpectedly. This reduces the risk that prices will plummet towards the end of the contract next week.

Oil demand showing strength after falling in recent months due to the corona pandemic. China daily crude oil usage data rebounded in April as refineries increased operations.

With this decline (oil prices) will not be as dangerous as the last time," explained John Kilduff, a partner at Again Capital Management in New York.

Correspondingly, the Organization of Petroleum Exporting Countries (OPEC) and other large producers have realized production cuts to reduce excess supply.

The organization will reduce production by 9.7 million BPD for May and June. Subsequently, production cuts were reduced to 7.7 million bpd in July-December, and 5.8 million BPD in January-April 2021.

Source: http://shorturl.at/boCK2