Ahead of a likely June 4 meet of the OPEC members and its Russia-led allies, both US and Brent crude futures scheduled to be expired on July, open up the Monday market sharply higher in the early Asia-Pacific trading hours with both of the futures’ prices surging just a notch shy of 1 per cent, as investors’ optimism appear to be bolstered over hopes of further output cut alongside a falling US crude production.
Aside from that, Friday’s remarks of the US President Donald Trump regarding the recent round of US-China spat on Hong Kong issue, seemed to be less threatening than initially feared, which in effect had added to further hopes as well.
Besides, encouraging signs of recovery of the Chinese economy in May had fleshed up investors’ bet over riskier assets, as the US Dollar index (DXY) measured against a basket of six major currencies alongside the key US stock indices’ futures had opened up the Monday market broadly lower.
Crude oil opens higher after record monthly gain on May
Apart from that, latest upsurge in crude oil futures’ prices came against the backdrop of a roughly 5 per cent rise of both US and UK crude futures’ prices on Friday, while the US WTI (West Texas Intermediate) crude oil futures’ prices logged an all-time high monthly gain of 88 per cent after plunging into a negative territory for the first time on record and the UK crude futures’ prices had reported a 40 per cent monthly rise at its strongest rebound since the March of 1999.
Besides, as investors’ optimism ramped up after Trump Administration’s response on China’s newly imposed National security law had been contemplated as less-lethal for the global money markets than initially feared, a partner at Again Capital in New York, John Kilduff said on Friday’s market closure, “There was a lot of nervousness going into this press conference, so it looks like the worst case scenario doesn’t appear to be emerging.
” On top of that, crude oil futures’ prices would likely to be supported by a record-low number of US drilling rigs amid a multi-year low crude oil prices, while optimisms over the June 4 OPEC+ meet, which has every potentiality to bring in a record output cut, appear to have eased impacts of the pandemic-led demand concerns, suggested analysts.