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Oil futures traded higher Thursday, bouncing a day after the U.S. benchmark closed below $20 a barrel for the first time since 2002 on the back of a global glut in crude created by the shutdown of major economies in the effort to contain the COVID-19 pandemic.
West Texas Intermediate crude for May delivery CL.1, +0.55% rose 19 cents, or 1%, to $20.06 a barrel on the New York Mercantile Exchange,. June Brent crude BRNM20, +3.25% jumped $1.20, or 4.3%, to $28.89 a barrel on ICE Europe. Oil slumped Wednesday after the International Energy Agency forecast a record drop in oil demand. Crude’s continued fall came despite a weekend agreement by major oil producers to curb output.
The demand picture remains front and center, with analysts looking for it to continue sliding at least through May.
“At the moment we expect the month of April to take the biggest hit, with demand for oil estimated at 72.5 million bpd (barrels per day), falling by 27.6 million bpd year on year, a 27.6% drop. Similarly, May’s demand is expected to fall by 19.5%, or 19.3 million bpd to 79.7 million bpd,” wrote analysts at Rystad Energy.
Meanwhile, efforts by leaders in Europe and the U.S. to begin reopening economies closed by the effort to contain the COVID-19 pandemic were credited with lifting global equities. President Donald Trump is expected Thursday to announce guidelines that would allow states to begin reopening certain activities, while Germany will allow small shops to reopen beginning Monday.
