Oil Rallies With Investors Eyeing Demand Recovery, Output Cuts
Four-week average of gasoline supplied to the market increased
West Texas Intermediate crude futures rose 2.7% Thursday
Oil rallied as investors looked past an increase in U.S. crude stockpiles to focus on tentative signs of a recovery in fuel demand as well as output cuts.
Futures in New York rose 2.7% Thursday. While U.S. government data showed that American crude stockpiles rose last week, the demand outlook is improving. The four-week average of gasoline supplied to the market has steadily risen as parts of the country emerge from coronavirus lockdowns. The Energy Information Administration again posted a large negative adjustment factor, indicating that production is probably lower than official data show.
“You still have a significant amount of production offline, which is helping bring supply and demand in balance, all the while, you have demand starting to recover as states open up in various stages,” said Nick Holmes, a portfolio manager at Tortoise. “People are looking more to the supply and demand equation.”
Read more here: https://www.bloomberg.com/news/articles/2020-05-27/oil-extends-drop-after-report-stokes-concerns-over-excess-supply