Oil rises on lower US inventories

new york — Global benchmark Brent rose on Thursday to its highest since March, supported by lower US crude inventories, Oprc-led supply cuts and recovering demand as governments ease restrictions on people’s movements imposed due to the coronavirus crisis.

Crude prices have slumped in 2020, with Brent hitting a 21-year low below $16 a barrel in April as demand collapsed. With fuel use rising and more signs that the supply glut is being tackled, Brent has since more than doubled.

Brent rose 15 cents, or 0.4 per cent, to $35.90 per barrel by 1525GMT. US West

Texas Intermediate crude fell 6 cents, or 0.2 per cent, to $33.43.

“Global supply has been curtailed to a great degree,” said Rystad

Energy analyst Paola Rodriguez Masiu. “We are on a clear path to a gradual recovery now.”

In the latest sign the supply glut is easing, US crude inventories fell 5 million barrels last week. Analysts had expected an increase.

“The rally in the crude futures is beginning to approach levels in which U.S. shale production declines will begin to slow and possibly reverse as low cost producers attempt to generate revenue,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.

At the same time, there is evidence of recovering fuel use. Top US airlines and Air Canada (AC. TO) on Tuesday reported slower ticket cancellations and an improvement in bookings on some routes, though executives said overall demand remained weak.