The price of a futures contract for Brent crude oil with July delivery on London’s ICE rose by 4.3% and reached $36.14 per barrel as of 17:54 Baku time, Report informs.
The last time the oil price of this grade was above $36 per barrel on April 9, 2020. In turn, the cost of WTI oil rose to $33.33 per barrel (+4.3%).
Notably, the market has rebounded because of the deep supply cuts that negative prices accelerated across the industry, from co-ordinated reductions by Opec and Russia to the dramatic slowdown of drilling in the US. These cuts have been painful for the industry, but they are a necessary step given the collapse in consumption caused by the coronavirus pandemic.
But of greater long-term importance for the health of the oil market over the rest of 2020 will be whether the rebound continues as lockdowns ease and the world attempts to get back to a semblance of normality.
BP estimates that when lockdowns were at their peak last month, global oil demand — usually about 100m barrels a day — was down by as much as 25-30 percent, with jet fuel and petrol consumption hardest hit.
Now, people do not need to venture far from their front doors to realize there are more cars back on the road.