Oil up after Saudi Arabia raises prices but oversupply worries persist

LONDON, May 8, 2020 – Oil ended the week by clawing back its losses from the previous session on Friday morning in Asia.

Brent oil futures rose 1.94% to $29.98 by 9:28 PM ET (02:12 AM GMT) and WTI futures gained 2.29% to $24.09.

WTI futures swung from dropping 1.83% to jumping over 11% on Thursday , and were up 19% for the week.

Some investors are cautiously optimistic with lockdown measures continue to be loosened in the US leading to slow but steady increases in demand in the country.

“Nascent signs of rebounding gasoline demand in the US and a rapid curtailment of oil production that has seen US producers cut over 1 million barrels per day of output in a matter of weeks has enabled oil prices to recover,” Again Capital’s John Kilduff told CNBC.

“Volatility will remain the watchword, but there is an increasing sense that the worst is behind the industry, at this point,” he added.

The black liquid also got a boost from Saudi Arabia raising its official selling prices overnight.

Mizuho energy analyst Paul Sankey said in a Thursday note the decision “alleviates pressure on global crude pricing. They [Saudi Arabia] are still fighting for market share (against Iraq/Iran primarily) in Asia but have backed off US market share competition all-but completely.”

Meanwhile other investors continued to warn that storage spaces are fast filling up even after OPEC+ and some US producers cutting production, with spaces expected to fill within weeks.

Investors will also be monitoring WTI futures’ transition from the June to the July contract on May 19.

By Investing.com: https://www.investing.com/news/commodities-news/oilup-after-saudi-arabia-raises-prices-but-oversupply-worries-persist-2165064

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