Oil price rise continues

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Oil prices have reached their highest level since March, after a drawdown of US crude inventories and output cuts by major producers helped ease concerns about excess supply.

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Brent Crude futures for July delivery were trading up 62 cents, or 1.7 per cent, at $36.37 per barrel at 05:50 BST, rising for a second day.

US West Texas Intermediate (WTI) crude futures for July were up 61 cents, or 1.8 per cent, at $34.10 per barrel, extending its gains into a sixth straight session.

Both prices are at their highest since March 11.

US crude inventories fell by five million barrels last week, Energy Information Administration (EIA) data showed, while stocks at the Cushing, Oklahoma, delivery hub dropped by 5.6 million barrels.

Prices have increased recently, with shipping data showing that OPEC+ (the Organisation of the Petroleum Exporting Countries, along with Russia and other allies), is complying with the pledge to cut 9.7 million barrels per day (bpd).

Physical crude markets are signalling a shift from an enormous oversupply at the peak of the coronavirus lockdowns in April towards an expected undersupply in the second half of the year.

Concerns about the longevity of the economic impact from the pandemic, especially in the US, the world’s biggest oil consumer, have applied downward pressure on prices.

 

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