Oil jumps on China export bounce, Saudi crude price rise
- Author: Darren Santiago May 10, 2020,
May 10, 2020, 0:21
As of writing, the WTI was down 3.8% on the day at $24.50.
Oil prices settled 5% higher on Friday in their second consecutive week of gains as US producers cut production with the number of drilling rigs falling to a record low, and as more states moved ahead with plans to relax lockdowns meant to halt the coronavirus pandemic.
"The latest report (on USA inventories) added to tentative evidence that - after a catastrophic few weeks - the pressure on the US oil market is beginning to lessen", Capital Economics said in a note.
Moreover, Saudi Arabia announced that it increased the official selling prices for all of its crude oil grades for June and provided an additional boost to the WTI. "I think there was some profit taking", said John Kilduff, partner at Again Capital LLC in NY. -China trade talks also supported prices.
Also coming to light on Friday was the mainstream media's role in causing the panic that facilitated the government lockdowns in the first place: Nate Silver, editor of FiveThirtyEight, blamed media for not giving proper context to stories on the rise of coronavirus cases, which he called a "basic error" revealed an agenda to prioritize narratives that "sound smart" over accuracy and truth.
NY state expands eligibility for coronavirus testing
Aside from a decrease in hospitalizations from COVID-19, the net number of intubations also declined by 115 to 3,577. Forty-two people were hospitalized in Onondaga County as of Sunday, a slight uptick from Friday and Saturday.
The U.S. Energy Information Administration's weekly report on Wednesday showed 15 weeks of consecutive rises in crude stocks although the rate of growth in inventories has slowed since a record build of 19 million barrels in early April. The latest numbers lifted the total to about 33 million claims since March 21.
Oil markets were battered in April as the virus strangled demand owing to business closures and travel restrictions, with U.S. crude falling into negative territory for the first time. While the April level 626 less than the same month a year ago.
Saudi Arabia raised its official sale price for crude oil. Oil prices have been on an upward swing, just as the market expects improvement based on the hope of output cuts by OPEC+ and oil-producing countries, and a gradual increase in oil demand globally.
However, the country's imports for all goods fell, suggesting any recovery is some way off as economies around the world fall into recession.