Oil market sees gains, still indecisive
Oil prices climbed up on May 1, developing the gains of the earlier session. The producers around the world started implementing cuts to their output, adapting to the lower demand during the pandemic.
By 06:42 GMT Brent crude July contracts gained 8% - US$0.22 - and reached US$26.70 per barrel. US crude June contracts went up 1.8% - US$0.34 - reaching US$ 19.18 per barrel. Brent crude climbed up 12% on April 30, negating some of its 60% losses of 2020.
The OPEC + agreement concerning the framework for output cuts, as well as the balancing of supply and storage facilities are now determining the state of the market. According to the forecast by Rystad Energy, the demand is expected to drop to around 13.6 million barrels daily this month and then reduce further down to 6.1 million barrels daily next month. The company’s analyst Louise Dickson warns, that gains do not yet mean a magickal recovery of the market.
Oil prices are expected to drop lower in 2020 despite the gradual slowing of the pandemic and easing of the lockdowns.