- WTI extends rebound, looks to close third straight day higher.
- Norway commits to cut oil output from June to December.
- Coronavirus optimism helps risk-sensitive oil find demand this week.
Crude oil prices rose sharply in the last hour and the barrel of West Texas Intermediate (WTI) touched its highest level since April 21st at $19.31. As of writing, the WTI was up 19.7% on the day at $18.38. Although there was no apparent driver behind the latest upsurge in crude oil prices, month-end flows ahead of the daily settlement seem to be providing a strong boost to the WTI.
Will crude oil recovery continue?
Earlier in the day, Noway’s oil and energy ministry announced that they will reduce the oil output by 250,000 barrels per day (bpd) in June and by 134,000 bpd in the last six months of the year to help crude oil preserve its bullish momentum.
Meanwhile, heightened hopes of remdesivir becoming an effective treatment against coronavirus and major economies starting to lift restrictions helped crude oil reverse its course following Monday’s sharp drop.
Commenting on the oil market’s dynamics and the WTI’s recent movements, “with North American demand starting to firm as things gradually open up, and global oil production dropping at a rapid pace starting in May, the currently surging inventories will accumulate at a slower pace,” said TD Securities analysts. “WTI prices should trend into the $30s as Q3 unfolds.”
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