Crude Oil Prices Jumps To 2 Months High, As Oil Demand Increases

Global crude oil prices in the International market on Wednesday has jumped to a 2-month high on expanding signs of an increase in oil demand.

Brandnewsday learned that Nigerian leading grade crude, Bonny Light has stepped up, as it traded at $30.00 per barrel on Wednesday against $29.65 by the end of Tuesday. The Nigerian leading grade crude, Bonny light, climbed by 13.77 percent as it hit $33.95 per barrel, growing to a 2-month high.

In a similar vein, the Brent crude has also jumped into a 2-month high, selling for $35.94 per barrel as at 08.45 pm on Wednesday the Nigerian time.  Also, front-month America’s WTI is selling for $33.68 per barrel. WTI contract has strengthened for six consecutive days.

Meanwhile, as the demand picking up due to the global easing of lockdown, the oil rally as extended to the fourth day. This shows that producers are implementing output cuts as promised.

Crude Oil Prices:

According to the US Energy Information Administration (EIA), the total crude oil and petroleum products (ex. SPR) stocks rose 5.04 mmb to 1399.92 mmb in the week ended May 15. Crude oil inventory declined -4.98 mmb (consensus: +1.15 mmb) to 526.49 mmb.

Stockpile fell in 3 out of 5 PADDs. PADD 2 (Midwest) alone saw a decline of -5.84 mmb. Cushing stock sank -5.59 mmb to 56.86 mmb, leaving the storage capacity to about 74% full. Utilization rate rose +1.5 percentage points to 69.4% while crude production slipped -0.1M bpd to 11.5M bpd for the week. Crude oil imports slipped -0.19M bpd to 5.2M bpd in the week

Read: Nigeria’s Bonny Light Experience Price Rise, Records $24.59

Concerning refined oil product inventories, gasoline inventory added +2.83 mmb to 255.72 mmb as demand fell -8.22% to 6.79M bpd. The market had anticipated a -2.13 mmb decrease in the stockpile. Production dropped -4.42% to 7.17M bpd while imports gained +8.23% to 0.53M bpd during the week. Distillate inventory gained +3.83 mmb to 158.83 mmb. The market had anticipated a +1.43 mmb increase. Demand jumped +22% to 3.82 bpd. Production slipped -1.8% to 4.8 mmb while imports soared +66.84% to 0.32M bpd during the week.

Released after market close on Wednesday, the industry-sponsored API estimated that crude oil inventory plunged -4.8 mmb during the week. For refined oil products, gasoline stockpile dropped -0.65 mmb while distillate rose +5.1 mmb.