Oil broke a two-day losing streak as Saudi Aramco predicted demand would continue to improve throughout the year, despite many parts of the world struggling to bring the coronavirus under control.
Crude consumption in Asia is almost back to pre-virus levels, Aramco CEO Amin Nasser said on Sunday after the world’s largest exporter reported a decline in the second quarter.profit. Meanwhile, oil drilling in the United States fell to its lowest level in 15 years as explorers abandoned growth plans and billions of barrels from old discoveries becamewithout value.
Oil is showing signs of a potential rise after being stuck at nearly $ 40 a barrel since early June as the riseviral infections have raised doubts about a sustainable recovery. However, OPEC + is expected to test appetite for demand, returningsome supply the market from this month following historic production declines.
The recovery in demand is better than expected and this is supporting prices, said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific. The easing of OPEC + cuts have already been taken into account, but sentiment is mixed for an economic recovery in the second half of the year, he said.
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Demand for oil is around 90 million barrels a day, said Aramco’s Nasser, againstpre-pandemic levels of around 100 million barrels per day. The state-controlled company reported a 73% drop in second-quarter net income after crude prices collapsed following a collapse in consumption.
In the United States, the number of active drills fell from four to 176, the lowest since July 2005, according to data from Baker Hughes Co. released Friday. Companies have parked rigs in an almost uninterrupted sequence for more than four and a half months.