Crude oil climbs 5% in second straight weekly gains on output cuts, demand hopes

by   |  VIEW 973

Crude oil climbs 5% in second straight weekly gains on output cuts, demand hopes

On Friday, the 8th of May 2020, both US and UK crude oil futures had rounded off the day more than 5 per cent higher, remarking their second straight weekly gains as the number of US drilling rigs had fallen to a record low followed by major US oil producers’ move to slash output, while an unprecedented return in risk-appetite over growing optimism on easing lockdowns had added to further bullish wing in Friday’s (May 8th) crude oil market.

In point of fact, Friday’s (May 8th) gain of crude oil futures’ prices were mostly meaded out of an 80-year-low US drilling rig figures, while according to the EIA data, the number of operational natgas and crude oil rigs had fallen to a record low of 374 last week, a level never seen in many generations as beforementioned.

On top of that, followed by the reveal of Friday’s (May 8th) US drilling rig count, several analysts were quoted saying that the N. American oil majors had been shutting down their production lines much earlier-than-anticipated and the small-scale on-shore drillers could have factually received a sentence to death amid a multi-year low oil futures’ prices, meaning that the US crude producers would highly likely to slash output by 1.7 million barrels per day or roughly 2 per cent of world’s entire crude output by end-June.

Meanwhile, adding that the Friday’s (May 8th) gains would unlikely to sustain in a short- to medium-term outlook, President of Ritterbusch and Associates in Galena, Illinois, Jim Ritterbusch wrote in a client report on Friday (May 8th), “This advance of the past couple of weeks has been a bit suspect given the fact that coronavirus cases continue to increase and the U.S.

crude surplus is maintaining a steep up trend where a record U.S. stock level is likely to be achieved in next week’s EIA report. ” Citing statistics, on Friday’s (May 8th) market closure, Brent crude futures’ prices had wrapped up the day 5.1 per cent higher to $30.97 per barrel and the US West Texas Intermediate crude futures’ prices jumped 5 per cent to wind down Friday’s market at $24.74 per barrel, while the UK and US crude oil futures had reported weekly gains of 18 per cent and 33 per cent respectively.