Oil prices rose on Thursday after a drop in U.S. crude stocks and an IEA forecast for lower global stockpiles in the second half, but the Brent benchmark still hovered around $30 a barrel as a bleak demand picture curbed gains.
Brent crude futures were up 80 cents, or 2.7%, at $29.99 per barrel at 0848 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 79 cents, or 3.1%, at $26.08 per barrel.
Prices have ticked up in the past two weeks as some countries relaxed coronavirus restrictions and lockdowns to allow factories and shops to reopen.
However, the emergence of new cases in South Korea and China has raised concerns over a possible second wave of infections which would weigh on economic recovery and fuel demand.
U.S. Federal Reserve Chairman Jerome Powell warned on Wednesday of an “extended period” of weak economic growth.
Providing some bullish impetus, U.S. crude inventories fell for the first time in 15 weeks.
U.S. crude stockpiles were down by 745,000 barrels to 531.5 million barrels in the week to May 8, the Energy Information Administration said on Wednesday.
But any respite is seen as too weak to erase a historic demand fall this year.
The International Energy Agency (IEA) on Thursday again forecast a record drop in demand in 2020 though it trimmed its estimate of the fall citing easing lockdown measures.
As demand picks up, the IEA expects crude stockpiles to shrink by around 5.5 million barrels per day in the second half.
Brent briefly spiked to $30.27 per barrel after the publication of the IEA’s monthly report.
Goldman Sachs said recovering demand and lower output would push the global oil market into deficit in June. However, it maintained its summer price forecasts of $30 per barrel for Brent and $28 per barrel for WTI.
The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday it expects 2020 global oil demand to shrink by 9.07 million bpd, a deeper contraction than its previous forecast of 6.85 million bpd.
It said it expected the second quarter to see the steepest decline in demand.
Reuters
