That demand has shown signs of coming back much more energetic and faster than most people had expected in China and the U.S.as well.
Oil was also supported by a record-low number of U.S. and Canadian oil and gas rigs, which indicates a further drop in supply out of the world's biggest crude producer.
The US Energy Information Administration reported a huge jump in the weekly crude oil inventory by 8 million barrels, which is the largest inventory build in four weeks. All of this would suggest that the world is going to see the global oil oversupply start to disappear as long as we don't take a big step back with another trade war. That brought the overall inventory up to to 535 million barrels, which while significant, did not affect oil prices. Many analysts say production has already fallen to as low as 10 million bpd, compared with 13 million bpd earlier this year.More news: United Kingdom protesters gather in solidarity with US — George Floyd
Saudi crude exports to India, its closest major market, plunged by nearly 50% to 560,000 barrels a day in May. We also saw 2.11 million barrels of oil go into the Strategic Petroleum Reserve at 534.4 million barrels. Inventories decreased by 5 million barrels during the previous week.
Nonetheless, a growing uncertainty on Kremlin's commitment to further output cut had kept the crude oil rallies in balance, however, the Saudi-led OPEC members were well-poised to incline a record output cut, OPEC+ sources had unveiled on condition of anonymity. "There is going to be an underlying depression in demand that is going to be there for some time".More news: India to loosen coronavirus lockdown
According to the EIA, US crude oil production averaged 11.4 million barrels per day (b/d) last week, down by 100,000 b/d from previous week and down by 900,000 b/d this time past year.
Saudi Arabia and some OPEC members are considering extending record production cuts of 9.7 million barrels per day beyond June, but have yet to win support from Russian Federation. July natural gas rose 2 cents to $1.85 per 1,000 cubic feet. Stocks were 778 BCF higher than last year at this time and 423 BCF above the 5-year average of 2,189 BCF.More news: Al-Aqsa mosque reopens after two-month coronavirus ban