Oil now faces demand uncertainty after record rebound from crash

Daniel Fowler
May 30, 2020

Brent crude slipped 25 cents, or 0.7%, to $35.04 a barrel by 0334 GMT and U.S. West Texas Intermediate crude was at $33.18 a barrel, down 53 cents, or 1.6%.

The Organization of the Petroleum Exporting Countries and producers iU.S. -Chinancluding Russia, a grouping referred to as OPEC+, are cutting their output by nearly 10 million barrels per day in May-June to buttress prices as the coronavirus pandemic quarantines have slashed fuel demand. -China relations. Nonetheless, the markets remain on track for a hefty monthly gain.

WTI is on track for a record monthly gain of 72% in May, with Brent set for a 35% increase that would represent its strongest monthly rise since March 1999, Reuters said. Prices are still headed for the biggest monthly jump in data going back to 1983.

Meanwhile, U.S. President Donald Trump is poised to sign a measure that would punish Chinese officials for imprisoning more than one million Muslims in internment camps, as he looks to rebuke Beijing over its crackdown in Hong Kong and its response to the coronavirus.

OPEC report

A total of 3.4 million tonnes (24.8 million barrels) of crude oil was discharged from floating storage into Asian markets in the past seven days, with China the top destination at 1.8 million tonnes and India second at 842,679 tonnes, according to oil analytics firm Vortexa. His announcement is likely to be the source of volatility later in the session.

U.S. gasoline inventories decreased by 0.7 million barrels, or 0.3%, to 255 million barrels for the week ending May 22, according to data released by the country's Energy Information Administration on Thursday.

Additionally, producers have scaled back output at a record pace as plunging prices made operation uneconomical.

The decline extended loses from Wednesday on uncertainty about Russia's commitment to deep oil production cuts in the lead-up to a June 9 meeting of the Organisation of the Petroleum Exporting Countries and its allies, dubbed OPEC+. Kuwait and UAE were among the other cartel members that followed suit and said they would also exercise additional cuts.

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