By Adedapo Adesanya
Brent Crude hit $36 per barrel on Thursday, May 21, the highest level since March, as decisions by governments to ease restrictions begin to yield results, causing an increased fuel use.
Brent crude oil, the international benchmark, rose by 1.01 percent or 35 cents to $36.11 per barrel on Thursday night, while the West Texas Intermediate crude oil, the US benchmark, rose 1.4 percent or 46 cents to $33.96 per barrel.
In April, the international benchmark hit its lowest point in 21 years, trading around $15 a barrel as demand collapsed, while the US crude went to the negative region.
Largely caused by the coronavirus pandemic, prices also slid further after Saudi Arabia declared a price war with Russia and flooded the market with cheap crude just as countries began going into lockdown to curb the spread of the virus.
But as global economies reopen slowly, fuel use has risen, giving more signs that the supply glut is being tackled and as a result prices has since more than doubled.
With compliance from members of the Organisation of the Petroleum Exporting Countries (OPEC) and its partners known as OPEC+ towards slashing 10 percent of output daily, the market is looking good.
So far in May, OPEC+ has cut oil exports by about 6 million barrels per day, according to data. This suggests a strong start in complying with the deal which usually faces compliance issues.
Reacting, OPEC said the market has responded well to the decision.
Data from the Energy Information Administration (EIA) on Wednesday was also supportive for prices, showing crude stocks at the storage hub in Cushing, Oklahoma, fell by about 5.5 million barrels for the week.
The data also represented a second weekly decline in overall US crude stockpiles, helping to ease concerns over tightening storage space that affected prices previously.
However, with this, many analysts expect fuel demand to remain fragile, with much of the world still practicing social distancing and global travel still well below normal levels.
Modupe Gbadeyanka