After months of fears and price slump, crude oil futures are rising and gaining ground. Worries that Covid-19 would severely impact demand was a large part of the fall—and it did. The market was so concerned that it even shrugged off deep cuts by OPEC+. Now that prices are rising again, what has changed?
One factor, of course, is that the world is starting to reopen. Parts of Europe and the United States are testing the waters, and places that are allowed to open have been flooded with eager customers tired of being in quarantine. This will lead to more demand for oil and gas, and thus prices will rise. Another factor could be that the world has been shut down for a few months now, long enough to start gauging how much oil demand has actually been affected. The API oil report showed crude inventories fell by 483K barrels last week—although gasoline inventories rose. A last factor, of course, is OPEC+ again: the group was scheduled to meet June 4, although that meeting may be delayed. The market will be watching closely to see if supply cuts are extended. Join us on TD Ameritrade Network to see the outcome of the meeting and other crude oil news!
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