Oil prices surge today

Crude oil prices have seen a jump lately, as number of signs indicated that US crude glut is increasing at a comparatively lower rate than what was expected earlier thereby, sending an emotion of relief globally.

The previous week had witnessed WTI crude prices to plunge below USD zero per barrel as May contracts were close to expiry and frantic selling was undertaken as increasing stockpiles resulted into the lack of storage capacity and additional storage costs were incurred. This had also dragged down Brent crude price but not as much. As reported by US Energy Information Administration, US crude inventories saw a growth by nine million barrels last week to 527.6 million barrels, well-below 10.6 million-barrel rise, which was as per the expectation of various analysts globally.

Crude oil demand can be seen picking up slowly as the respective governments globally have started withdrawing the restrictions and lockdowns, which were first implemented to curb the spread of Coronavirus and had caused muted economic demand globally. Regulators in Texas, which is one of the biggest oil producing states in US, will vote on May 5 to discuss whether to possibly allow a legal way of output cuts. Officials in other US states such as of North Dakota and Oklahoma are also examining the possibility of cuts. As for the future, the expiry of June contract for Brent oil futures in Europe on Thursday will be a watched after event in the oil markets.

On Thursday, WTI crude price rose by 16.26 per cent and was trading at USD 17.51 per barrel for June contract while, Brent crude price increased by 4.45 per cent and was trading at USD 25.34 per barrel. Since the beginning of this week, WTI crude price rose 37.01 per cent and Brent crude price witnessed an increase of 9.83 per cent.