Crude oil climbs to two-month peak after plunge in US inventories

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Crude oil climbs to two-month peak after plunge in US inventories

On Thursday, the 21st of May 2020, both the US WTI and Brent crude oil futures’ prices rose to their highest level since mid-March, as a sweeping drawdown in crude inventories alongside production cuts by a majority of crude exporting nations, offset pressures of an intense supply glut, while ease of lockdown efforts across the globe alongside a revival of Chinese economy appeared to have overshadowed the frets of the Pandemic’s financial fallouts.

On top of that, as a number of US shale operators have been grappling with a bankruptcy warning that lurks over the horizon amid a multi-year low crude oil futures’ prices alongside a pandemic-driven demand crunch, suggesting a likely wind-down of US onshore drilling operations for an indefinite period, EIA (Energy Information Administration data) data released on Wednesday (May 20th) had revealed that the US crude inventories had witnessed a shortfall of five million barrels last week, insanely missing an analysts’ expectation of a rise of 1.2 million barrel, as stockpiles at the Cushing, Oklahoma delivery hub had been hoisted down by 5.6 million barrels.

US Crude Oil Inventories in severe drought; Shale operators near bankruptcy

Meanwhile, referring to a fairly upbeat impact of US inventories’ crush over the global crude oil futures’ market, Capital Economics said in a client note on Wednesday (May 20th), “While signs that WTI storage pressures are abating is positive for prices, the latest report shows that the fall in stocks owes more to supply factors than growing product demand.

” Quoting statistics, as both US and UK crude futures’ prices scheduled to be expired on July have been harbouring over their highest level since March 11, during the preparation of the report on Thursday (May 21st), GMT.

08.30, UK crude futures’ prices were trading 1.7 per cent higher to $36.37 a barrel, registering gains for the second consecutive session, while the US WTI (West Texas Intermediate) crude oil futures’ prices cruised 1.8 per cent higher to $34.10 per barrel, extending the futures’ winning streak into the sixth straight days in a row.