Oil prices have witnessed a rise as the easing of global lockdown measures related to the Covid-19 pandemic increased expectations for traders for a speedy recovery in demand.
Brent crude futures increased 0.3% to $40.94 a barrel while the US West Texas Intermediate (WTI) crude futures rose 0.7% to $38.45 a barrel, Reuters reported.
US city New York, hardest hit by the global coronavirus outbreak, started reopening after about three months. This potentially spurred demand for fuel.
A preliminary poll by the news agency has revealed that crude and gasoline inventories in the US are estimated to have declined by 1.5 million barrels and about 100,000 barrels, respectively in the week that ended on 05 June.
This poll comes ahead of a report from the American Petroleum Institute industry group.
Distillate inventories including diesel and heating oil, however, were witnessing an increase by 2.9 million barrels.
National Australia Bank commodity research head Lachlan Shaw was quoted by Reuters as saying: “You’ve got demand recovering gradually but steadily.
“However there’s still massive excess supply, so OPEC and friends need to control barrels coming into the market.”
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, together known as OPEC+, have agreed to extension of supply cuts for one month through next month.
However, Saudi Arabia and its allies Kuwait and the United Arab Emirates did not agree to extend an additional 1.18 million bpd in cuts on top of the OPEC+ cuts next month.