Oil steadied in Asian trading after rallying to the highest level since 2014 following a decision by OPEC+ to maintain its planned gradual increase of supply, despite the market facing an energy crunch.
Oil held the bulk of a three-day advance to trade above $71 a barrel amid optimism that rising demand will tighten the global market.
Oil extended losses as a coronavirus resurgence raised concerns about demand ahead of an OPEC+ meeting this week that could see the alliance boost some halted output.
Oil extended a powerful rally, with global benchmark Brent closing in on $75 a barrel, after data pointed to a substantial draw in US crude stockpiles and top traders predicted further gains in prices.
Oil declined as investors assessed the International Energy Agency’s reduced forecasts for global oil demand in part due to a slowdown in air travel.
U.S. oil prices aren’t expected to repeat last month’s unprecedented collapse into negative territory, industry experts say, because the nation’s stockpile has slowly decreased, easing a storage crisis, while traders “learned their lesson.”
Oil climbed after losing more than a quarter of its value over the past two days with volatility likely to continue on concern prices may drop below zero again as investors and a major fund exit the June contract.
Share price growth for oil majors BP and Shell boosted the FTSE 100 yesterday, with London’s blue-chip index rising 111.1 points, or more than 1.9%, to 5,958.5.
The price of Brent crude has continued to recover today after the oil price rout of earlier this week.
Offshore platforms in the UK North Sea “face the risk of production shut-ins” due to oil storage constraints, according to leading analysts.
A leading petroleum economist has said it would “require something cataclysmic” for the international oil benchmark to follow that of the US into negative pricing.
The prime minister and first minister have both been urged to announce cash to bolster the north-east energy industry.
Oil rebounded in Asian trading, after plunging below zero for the first time in history amid rapidly filling American storage tanks, as the U.S. benchmark’s May contract entered its final trading session.
The day started like any other gloomy Monday in the oil market’s worst crisis in a generation. It ended with prices falling below zero, thrusting markets into a parallel universe where traders were willing to pay $40 a barrel just to get somebody to take crude off their hands.
Oil extended its slide, falling to the lowest in more than two decades, on concern the world is rapidly running out of places to store crude after output cuts proved insufficient to cope with plunging demand.