"Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain," Saudi Energy Minister Prince Abdulaziz bin Salman told ministers and officials at the OPEC+ meeting during a video conference Saturday.
Taking effect May 1, the 9.7 million bpd in production cuts were scheduled to taper down to 7.7 million bpd for the second half of 2020.
China's latest import data suggests crude demand in Asia's largest economy has already rebounded from pandemic lows in just three months as more drivers seem to prefer the safety of a private vehicle rather than using public transport -- a trend that is now emerging in other coronavirus-hit economies. Crude imports soared to an all-time high 11.34 million bpd in May, a 15% jump from month prior. Tanker-tracker data from Kpler suggests China's crude oil imports are now on track for 14 million bpd in June, with about 190 oil supertankers expected to arrive in the next two weeks.
In the United States, traffic also rebounded to pre-pandemic levels over the weekend, with states like New York, California, and Washington, D.C., reporting a pickup in mobility. Other real-time economic indicators, including restaurant reservations and TSA flight data are also trending higher. In consumer-driven economies like the United States and some Western European countries, the demand rebound will largely depend on the extent to which people are comfortable reengaging in the larger economy, with early signs pointing to a V-shape recovery.
Employment in the United States surged 2.509 million last month despite none of the labor demand surveys suggesting this could be possible. Median expectations were for 7.5 million job losses after the economy shed nearly 20 million jobs in April. Investors are eager to garner clues on the stunning jobs report from the Federal Reserve that is set to release its updated policy statement and new set of economic projections on Wednesday. Central bank is not expected to dial back rates, which currently stand in a target range between 0% and 0.25%.
U.S. equities look to add to a record-breaking rally on Monday, with Dow Jones Industrials set to gain 190 points at the market open.
In early trading, NYMEX West Texas Intermediate July futures faded from a three-month high $40.44 bbl and Brent crude for August delivery eased after reaching a $43.41 bbl high. NYMEX RBOB July futures rallied 2.18 cents to $1.2354 gallon and July ULSD futures were 1.19 cents higher at $1.1625 gallon.
Liubov Georges can be reached at liubov.georges@dtn.com
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