New York futures rose 92% in the three months through June 30 after the worst quarter on record crude

Oil posted its best quarter in nearly 30 years, recovering from this year’s historic price drop.

Futures in New York rose 92% in the three months through June 30 after the worst quarter on record crude, driven by production cuts from the OPEC + and the rebound in oil consumption in China after the close. The rise in the market from negative territory in April has been rapid but uneven, with the US benchmark struggling to stay above $ 40 a barrel amid stubborn oversupply and a resurgence of covid cases. 19 that darkened the demand landscape.

“It’s not going to go back up to $ 60 overnight, but getting to where we are now is an incredible story,” said Phil Flynn, analyst at Price Futures Group Inc .. How quickly can the market complete its market? . Recovery is an open question. “Getting out of the routine will have to happen one day at a time,” he said.

Although demand is gradually improving, it is still a long way from pre-crisis levels. In the US, an increase in virus cases is causing many states to pause or reverse reopens, which could curb summer travel just as fuel consumption began to rise. Across the Atlantic, European Union governments extended the travel ban to US residents.

The increase in US inventories is also affecting prices, which have still dropped more than 30% so far this year. Crude reserves have expanded over the past three weeks to the highest level on record, while diesel supplies have increased during 11 of the past 12 weeks.

The situation may change once the Energy Information Administration releases its latest inventory data on Wednesday. The American Petroleum Institute, funded by the industry, reported that the United States’ crude reserves decreased 8.16 million barrels last week, according to people familiar with the data. If confirmed by the government report, it would be the largest draw since December. Supplies in Cushing, Oklahoma increased by 164,000 barrels, according to the report.

Price increases have led some US producers to restart wells that closed after the collapse. ConocoPhillips said Tuesday it will restore reduced production next month.

Prices
West Texas intermediate crude for the August settlement fell 43 cents to settle at $ 39.27 a barrel in New York.

Brent for August delivery, which expired Tuesday, was down 56 cents to end the session at $ 41.15 a barrel. The busiest September contract fell 58 cents to hit $ 41.27 a barrel.

While increasing US production complicates OPEC + ‘s goal of balancing the market, the producer alliance has delivered on its historic commitment to cut production, but nearly 10 million barrels a day. Saudi Arabia and Russia have reduced exports to multi-year lows, supporting physical prices in some parts of the world.

In another bright spot for the oil market, China’s recovery continues with June manufacturing data that exceeds estimates, pointing to higher demand from the world‘s biggest consumer.

“The worst is over,” said Amin Nasser, executive director of Saudi Aramco, in an interview with IHS consultant Markit. “I am very optimistic about the second half of this year. We see it today in China, it is almost 90%. “

Other news from the oil market
Russia, often lagging behind in previous OPEC + deals, approached its production target this month, as the alliance demanded full compliance from each member with the landmark deal.

Shell will score between $ 15 billion and $ 22 billion in the second quarter, as the company gave investors a broader view of the severity of the coronavirus crisis in Big Oil.

Saudi Arabia, the de facto leader of the OPEC cartel, made a call with fellow member Nigeria as the organization struggles to cut production aimed at boosting global crude oil markets.

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