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By James Thornhill in 5/4/2020
SYDNEY (Bloomberg) – Oil extended its recovery to a fifth day on signs that an excess could be decreasing as the main producers reduce their activity.
Futures in New York rose nearly 5%, after rising 3.1% on Monday, in the longest winning streak since July. Genscape reported an inventory build of 1.8 million barrels in Cushing, Oklahoma, the delivery point for West Texas intermediate crude. If the US government USA Reporting a similar number on Wednesday, would mark the smallest increase in the center since mid-March.
The discount on crude for June delivery relative to July, a structure known as contango, was reduced to a minimum in about a month, indicating that concerns about oversupply may be easing.
Prices
- West Texas Intermediate for June delivery rose 93 cents to $ 21.32 a barrel on the New York Mercantile Exchange at 8:11 a.m., Sydney time.
- June WTI advanced 61 cents to settle Monday at $ 20.39 a barrel.
Brent for the July deal gained 76 cents to close at $ 27.20 a barrel at ICE Futures Europe in London.
In the United States, Texas regulator Ryan Sitton said on Bloomberg TV on Monday that an effort to order cuts in oil production is “dead” a day before the state decided to vote on the measure. However, even without quotas, explorers are voluntarily shutting down large volumes of oil, and Exxon Mobil Corp., Chevron Corp., and ConocoPhillips plan to cut up to 660,000 barrels per day of combined US production by the end of June.
OPEC + production cuts soared on May 1, though the bloc increased most in nearly 30 years in April when members waged a price war, keeping supplies high even as coronavirus blockades saw demand dissipate. It will take time to work on that inventory.
Canadian heavy crude rose at its strongest price compared to futures since at least 2008 as Enbridge Inc. agreed to open part of its pipeline system for crude storage.
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