Oil prices complete third week in a row

On Friday, oil prices rise, completing growth for the third week in a row, thanks to the hopes that a reduction in production along with the gradual removal of quarantine restrictions will allow achieving a balance of supply and demand in the market.

According to INTERFAX, the cost of July Brent crude futures on the London ICE Futures exchange at 8:15 Moscow time was $31.7 per barrel, which is $0.57 (1.83%) higher than the closing price of the previous session. As a result of trading on Thursday, July futures rose on $1.94 (6.7%).

Futures for WTI oil in June in electronic trading on the New York Mercantile Exchange (NYMEX) by this time rose in price by $0.29 (1.05%) - up to $27.85 per barrel. By the close of previous trading, the contract price increased to the maximum since April 3 of $27.56 per barrel, rising by $2.27 (9%).

Since the beginning of this week, Brent has risen in price by almost 3%, WTI - by 13%.

The increase in oil prices was supported by the recent decision of Saudi Arabia to cut production in addition to the reductions previously agreed under OPEC+, which other states supported.

The International Energy Agency (IEA) expects a sharp decline in production by Saudi Arabia, as well as a drop in oil production in the US and Canada, will lead to a historic decline in world oil supplies in May - by 12 million barrels per day (b/s), to 88 million b/s, the minimum over the past nine years.

In addition, in a monthly report released on Thursday, the IEA improved its forecast for oil demand in the second quarter. According to new estimates, global demand in April-June will decrease by 19.9 million b/s, to 79.3 million b/s. The IEA's previous forecast suggested a drop in demand of 3.2 million b/s more.

“The market sentiment is becoming cautiously optimistic, and I expect it to remain that way if there is no serious pullback in terms of improving the epidemiological situation in the world”, – Vandana Hari, founder of Vanda Insights in Singapore, said.

"Demand forecasts, however, remain volatile, and traders nervously follow what happens after the economies open", – Bloomberg quoted the expert.

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