By Adedapo Adesanya
For the first time since April 15, the Brent Crude rose above $30 per barrel at the global oil market on Tuesday, May 5.
The crude futures gained 13.9 percent or $3.8 yesterday to sell at $30.97 per barrel, while the West Texas Intermediate (WTI) crude increased by $4.17 or 20.5 percent to trade at $24.56 per barrel.
The gains achieved by the Brent and WTI was boosted as traders continue to be moved by decisions of several major economies to ease coronavirus lockdowns, allowing for greater economic activities, which in turn cause a spike in the demand for oil.
In Europe and China, workers have started returning to work and investors are optimistic that restrictions on travel and movement will continue to ease.
Analysts are looking at this continuing this week, as looming storage capacity crisis continue to drop in the face of the OPEC+ 9.7 million barrels per day production cut, which kicked off last Friday.
Prices were green on Tuesday for the fifth straight session and the news that oil glut may ease also contributed to the bullish day.
There were reports of an increase in crude inventories of 1.8 million barrels at Cushing, Oklahoma, the delivery point for WTI crude, which would be the smallest weekly gain since mid-March if confirmed by official government data due on Wednesday evening.
However, despite the major production cut, the oil market is still under pressure and the next few weeks are likely to reveal more weakness.
And with a decision by American commissioners for the Railroad Commission of Texas, which regulates the state’s oil and gas industry, on Tuesday to reject a proposal to cut Texas crude-oil supplies, this may renew pressures.
At a meeting last month, Commissioner Ryan Sitton had proposed a state cut of 20 percent or about 1 million barrels per day, under certain conditions but voting against the proposal, Chairman Wayne Christian said the problem for the oil market is largely demand.
But with demand not likely to return to top levels, many analysts see some possibility of this decision hurting crude prices.
Modupe Gbadeyanka