Crude oil rises more; Norway agrees to cut production by Investing.com

By Peter Nurse

Investing.com – Oil prices rose on Thursday, rebounding amid hopes that moves to correct the nature of market oversupply may be having some effect.

At 10:15 a.m. ET (1415 GMT), futures were up 17% more at $ 17.68 a barrel, while the benchmark international contract Brent rose 10% to $ 26.68.

Global oil demand is on the verge of falling by 9 million barrels per day, or around 9%, this year to the lowest level since 2012, the IEA said in its Global Energy Review, as transport stopped virtually in the back of the coronavirus. outbreak.

Still, as bad as that estimate sounds, it’s in line with the agency’s forecast for mid-April, suggesting that the situation had not deteriorated.

On the positive note was the news that Norway, the largest oil producer in Western Europe, joined international efforts to reduce supply for the first time in nearly two decades.

Norway will cut production by 250,000 barrels a day in June and 134,000 barrels in the second half of the year, the oil and energy ministry said on Wednesday.

This followed US crude oil inventories. USA That grew 9 million barrels last week to 527.6 million barrels, according to data from the US Energy Information Administration. USA, Well below the 10.6 million barrel increase that analysts had expected.

“If we see a continuation of this trend in the coming weeks, it could suggest that the worst could be behind the oil market,” said ING chief commodity strategy officer Warren Patterson.

That said, on Thursday we saw more examples of the damage that low prices have caused to major oil producers.

Royal Dutch Shell (LON 🙂 cut its dividend for the first time since World War II, while ConocoPhillips (NYSE 🙂 decided to almost double its production cuts to 420,000 barrels per day in June, from 230,000 barrels per day in May.

Oil prices are experiencing a historical decline. The international benchmark index remains the lowest since 2002, trading just above $ 20 a barrel in London, while US futures are. USA They briefly fell below zero last week.