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Oil Gains on Signs of Output Cuts and Improved Demand

Oil Gains on Signs of Output Cuts and Improved DemandOil Gains on Signs of Output Cuts and Improved Demand

Oil prices rose slightly on Tuesday amid signs that producers are cutting output as promised just as demand picks up, stoked by more countries easing out of curbs imposed to counter the coronavirus pandemic.
Benchmark Brent crude climbed 7 cents, or 0.2%, to $34.88 a barrel, after earlier touching its highest since April 9. US West Texas Intermediate crude was up 70 cents, or 2.2%, at $32.52 a barrel, Reuters reported.
The June WTI contract expired on Tuesday, but there was little sign of a repeat of the historic plunge below zero seen last month ago on the eve of the May contract’s expiry amid signs of rising demand for crude and fuels. The July WTI contract was up 12 cents per barrel at $31.77.
The market was boosted earlier by signs that output cuts agreed by the Organization of the Petroleum Exporting Countries and others including Russia, a group known as OPEC+, are being implemented.
OPEC+ cut its oil exports sharply in the first half of May, companies that track shipments said, suggesting a strong start in complying with their latest pact to curb output. A recovery in fuel demand in India also gathered momentum in the first half of May.
Still, global demand recovery is expected to be slow as some restrictions remain and there is a significant risk of repeat outbreaks and lockdowns.

 

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