Oil extends gains amid signs of China demand pickup, global supply overhang fading
Oil prices rose on Friday, extending day-earlier gains, as data showed demand for crude picking up in China after the easing of curbs to stem the coronavirus outbreak, boosting hopes that the global supply overhang may start to fade, Reuters reports.
Brent crude was up 39 cents, or 1.3% at $31.52 a barrel by 0333 GMT, after rising nearly 7% on Thursday. The global benchmark is heading for a 1.8% gain on the week after rising for the previous two weeks.
West Texas Intermediate (WTI) oil was up 19 cents, or 0.7%, at $27.75 a barrel, having jumped 9% in the previous session. WTI is heading for a third weekly increase, up more than 12%.
Amid supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other major producers, bright spots are also emerging on the demand side. Data released on Friday showed China’s daily crude oil use rebounded in April as refineries ramped up operations.
Still the market mood remains far from euphoric, with the coronavirus pandemic far from over and new clusters emerging in some countries where lockdowns have been eased.
On the production side, OPEC and associated producers - collectively known as OPEC+ - had already agreed to cut output by a record of nearly 10 million bpd before Saudi Arabia this week extended its planned reductions for June, pledging to lower supply by nearly 5 million bpd.