Some consumers, shunning mass transit and opting for the isolation of cars, are buying more gasoline, the Wall Street Journal reports, giving oil demand a much-needed boost as parts of the world begin to reopen from coronavirus lockdowns.
The world is expected to consume 21.5 million fewer barrels a day this month compared with a year ago, the International Energy Agency said in its monthly oil report Thursday. Brent crude oil gained 6.6% to close at $31.13 a barrel on Thursday and West Texas Intermediate futures for June delivery rose 9% to $27.56. The WTI July contract gained 8.6% at $27.88 a barrel.
The easing of lockdown restrictions coincides with massive, coordinated production cuts from oil-producing nations including Saudi Arabia, Russia and the U.S. Consequently, global offshore inventories—which had been rising continuously since the beginning of the pandemic in January—fell by 2.2 million barrels in the week leading up to May 8.
