Oil Gains on Hopes for Demand Rebound as Virus Lockdowns Ease

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Oil Gains on Hopes for Demand Rebound as Virus Lockdowns Ease
Credit: © Reuters.

(Bloomberg) -- Oil prices rose in Asia after the head of the International Energy Agency gave an upbeat assessment on the prospects for a demand recovery as coronavirus restrictions are lifted around the world.

Futures in New York were up 1.4% from Friday’s closing price. There was no settlement in the U.S. market on Monday due to a holiday. Fatih Birol, executive director of the IEA, said oil consumption hasn’t yet peaked, countering speculation that the virus will have a long-term impact.

Russia, OPEC’s key ally in a deal to cut oil production and ease a global glut, sees the market balancing in June or July. Around the world, producers have lowered global oil supply by 14-15 million barrels a day so far, Energy Minister Alexander Novak said on Monday.

Crude futures have surged more than 75% this month, following a historic crash in April, as countries began to ease lockdowns aimed at curbing the spread of Covid-19. The price recovery has been supported by a faster-than-expected retreat in drilling and production in the U.S. and elsewhere.

Big oil’s annual general meetings in the U.S. and Europe this week should shed light on how heavily producers have been hit by lockdowns, with Total SA (NYSE: TOT ), BP (NYSE: BP ) Plc, Exxon Mobil Corp (NYSE: XOM ). and Chevron Corp. (NYSE: CVX ) among those fronting shareholders.

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