By CHIKA IZUORA, Lagos
Oil prices jumped by more than $1 a barrel yesterday to their highest in more than a month, supported by ongoing output cuts and signs of gradual recovery in fuel demand as more countries ease curbs imposed to stop the coronavirus pandemic spreading.
Brent crude climbed $1.34, or 4.1 per cent to $33.84 a barrel, after touching a high since April 13. U.S. West Texas Intermediate crude was up $1.40, or 4.8 per cent at $30.83 a barrel, the highest in nine weeks or since March 16.
The June WTI contract expires today, but there was little sign of WTI repeating the historic plunge below zero seen last month on the eve of the May contract’s expiry amid signs that demand for crude and derived fuels is recovering from its nadir.
Production is also falling as U.S. energy firms cut the number of oil and natural gas rigs operating to an all-time low for a second consecutive week. That partly helped ease concerns about the WTI contract’s delivery point in Cushing, Oklahoma, running out of space.
The Chicago Mercantile Exchange, which hosts trading in WTI futures, brokerages and the United States Oil Fund LP, the largest oil-focused exchange-traded product in the country, have all taken steps that reduce open positions ahead of the WTI contract’s expiry.