Oil rose on Wednesday, with Brent at $40 for the first time since March, as optimism mounted that large producers will extend production cuts and a recovery from the coronavirus pandemic will spur fuel demand.
Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicentre of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread. “Even deeper cuts will speed up the process of rebalancing the market,” ING Economics said, noting the “market was already set to transition from surplus to deficit as we move into the second half of this year”.
“As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,” Capital Economics said in a note, estimating that global oil consumption will fall to just under 92-million barrels a day on average in 2020.
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