Oil prices claw back losses as storage fills less rapidly than feared
U.S. oil prices jumped on Wednesday, trimming some of this week’s losses, after U.S. stockpiles rose less than expected and on expectations demand will increase as some European countries and U.S. cities moved to ease coronavirus lockdowns.
U.S. West Texas Intermediate (WTI) crude (CLc1) futures climbed to a high of $14.40 a barrel and were up 15.4%, or $1.90, at $14.24 at 0233 GMT, paring a 27% plunge over the first two days of this week.
Brent crude (LCOc1) futures rose 4.6%, or 93 cents, to $21.39 a barrel, adding to a 2.3% gain on Tuesday.
“It’s a little bit of good news that maybe storages aren’t filling quite as quickly in the U.S. as you would have thought,” said Lachlan Shaw, head of commodity research at National Australia Bank (OTC:NABZY) in Melbourne.
Regulators in the U.S. state of Texas, the country’s biggest oil producer, will hold a vote on May 5 on whether to enact output curtailments. Officials in the states of North Dakota and Oklahoma are also examining ways to legally allow output cuts.
That would add to production cuts of almost 10 million bpd agreed by the Organization of the Petroleum Exporting Countries (OPEC) and other large producers including Russia, or about 10% of global production, due to take effect from May 1.
“The other thing coming through is more detail and a louder groundswell towards plans for removing COVID restrictions, particularly in Europe — in countries like Spain, France, Austria and Switzerland. That’s going to see demand pick up,” Shaw said.