© Reuters.
By Peter Nurse
Investing.com - Oil prices pushed higher Thursday, rebounding amid hopes moves to correct the oversupplied nature of the market may be having some effect.
AT 10:15 AM ET (1415 GMT), futures traded 17% higher at $17.68 a barrel, while the international benchmark Brent contract rose 10% to $26.68.
Global oil demand is poised to slump by 9 million barrels a day, or about 9%, this year to the lowest level since 2012, the IEA said in its Global Energy Review, as transportation came to a virtual halt on the back of the coronavirus outbreak.
Still, as bad as that estimate sounds, it’s inline with the agency’s forecast in mid-April, suggesting the situation hadn’t deteriorated.
Adding to the positive tone was the news that Norway, western Europe’s biggest oil producer, joined international efforts to curb supply for the first time in almost 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 Petroleum and Energy Ministry said late on Wednesday.
This followed U.S. crude inventories growing by 9 million barrels last week to 527.6 million barrels, according to U.S. Energy Information Administration data, well below the 10.6 million-barrel rise analysts had expected.
"If we see a continuation of this trend in the coming weeks, it could suggest the worst might be behind the oil market," ING's head of commodities strategy Warren Patterson said.
That said, Thursday saw more illustrations of the damage the low prices have done to the major oil producers.
Royal Dutch Shell (LON:) cut its dividend for the first time since the Second World War, while ConocoPhillips (NYSE:) has decided to nearly double its production cuts to a net 420,000 barrels a day in June, from 230,000 barrels a day in May.
Oil prices are experiencing a historic slump. The international benchmark remains near the lowest since 2002, trading just above $20 a barrel in London, while U.S. futures fell briefly below zero last week.
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.