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Oil gains on hopes that easing of coronavirus curbs will trigger demand boost

Published 08/05/2020, 02:52
Updated 08/05/2020, 02:54
© Reuters.

TOKYO, May 8 (Reuters) - Oil prices rose on Friday as more
countries began easing lockdowns set in place to stop the
coronavirus spreading, giving hope that demand for fuels will
pick up after the economic devastation caused by the pandemic.
Brent crude LCOc1 was up 47 cents, or 1.5%, at $29.33 a
barrel by 0121 GMT, having fallen nearly 1% on Thursday.
U.S. oil CLc1 gained 48 cents, or 1.5%, to $24.03 a
barrel, after a decline of nearly 2% in the previous session.
Both contracts are heading for a second week of gains after
the depths plumbed in April, when U.S. oil crashed below zero.
But crude is still being pumped into storage tanks on land and
tankers at sea, raising the prospect that gains prompted by
stronger demand will be capped.
"Even with the early signs that demand is beginning to
stabilise, inventory builds are likely to continue for some
time, and storage capacity (usage) continues to creep up," said
Stephen Innes, chief market strategist at AxiCorp.
U.S. crude inventories at the Cushing storage hub in
Oklahoma increased by around 407,000 barrels in the week through
May 5, traders said on Thursday, citing Genscape data.
Meanwhile Australia is set to be the latest country to begin
easing restrictions on social contact and movement as the
country's infections from the virus slow to a trickle. The
government will loosen curbs in stages over four weeks, sources
told Reuters. France, parts of the United States including Michigan and
other countries are also planning to ease the restrictions
instituted to stop the spread of the world's worst health crisis
in a century.

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