Oil prices are preparing to close May with record monthly growth
Oil prices have been falling on the last trading day of May amid worsening of relations between Washington and Beijing and US reserves rise. Despite that, WTI quotations are preparing to close May with a record monthly growth (in percent) in the almost 40-year history.
In the first decade of June a virtual meeting of the new OPEC+ deal participants is to take place, and Russia has already signaled its intention to increase production soon. Therefore, in the coming days the market participants will closely follow the position of this coalition members.
The return of energy demand to pre-crisis levels is likely to be long and difficult. However, Asian refiners are already actively buying black gold around the world amid growing demand for gasoline as the world gradually emerges from coronavirus quarantine.
Citigroup forecasts the record oil supply surplus in the second quarter will be replaced by a record deficit in the third. However, there are fears that the likely second wave of the Covid-19 pandemic will disrupt the fragile global economic recovery and bring down energy demand again. In addition, rising oil prices could encourage producers to increase production.