Oil back at early April highs as demand picks up

london — Oil prices rose on Friday, with US crude jumping more than six per cent to its highest since March on signs that demand was picking up, with China reporting increased refinery runs and rounding out a week of bullish news on the supply front.

West Texas Intermediate (WTI) oil was up $1.79, or 6.4 per cent, at $29.32 a barrel at 1618GMT, after reaching $29.37, its highest since mid-March. WTI soared nine per cent in the previous session.

Brent crude was up $1.03, or 3.3 per cent at $32.17 a barrel. The session high was $32.50, highest since April 13. Brent rose nearly seven per cent on Thursday. Both contracts were on track for a third consecutive week of gains.

“Refinery utilisation numbers from China overnight were very good,” said

Bob Yawger, director of energy futures at Mizuho in New York. “You have to cover your eyes and not look at US refinery utilisation, but there are some bright spots.”

Amid supply cuts by the Organisation of the Petroleum Exporting Countries (Opec) and other major producers aimed at reducing a glut, there also are signs of improving demand. Data showed China’s daily crude oil use rebounded in April as refineries ramped up operations.

Still, the market remained cautious with the coronavirus pandemic far from over and new clusters emerging in some countries where lockdowns have eased.

“Oil prices have been up significantly since yesterday thanks to a better assessment of the situation by the International Energy Agency (IEA),” Commerzbank said in a note.

The IEA expects global crude inventories to fall by about 5.5 million barrels per day (bpd) in the second half of this year. —