Oil posts biggest monthly gain on record

Bloomberg:
Oil posted its biggest monthly advance on record, just a few weeks after prices made a dramatic plunge below zero.
Crude surged about 88 per cent in May, with U.S. futures on Friday rising above US$35 a barrel for the first time since March, driven by massive supply curbs by producers across the world. Still, prices are well below levels at the start of the year, and demand that was crushed by the coronavirus crisis may need to show a sustained improvement for the rally to extend further.
For now, the outlook for consumption looks bleak, though it’s on the mend. While virus-related lockdowns are easing, demand isn’t yet roaring back in the U.S. Fuel sales that were clobbered in European nations such as Spain and Italy will take time to recover. China is a bright spot, but the rest of Asia is still struggling.
The number of rigs drilling for oil in the U.S. fell for the eleventh week, stemming the massive glut of crude that flooded the market. Yet there’s a risk that oil’s advance could tempt producers to turn on their taps again.
“At the end of the day, what is driving everything is fuel demand,” said Tom O’Connor, senior director of petroleum markets at global consultancy ICF. “There is going to be an underlying depression in demand that is going to be there for some time.”
U.S. crude futures fluctuated Friday, as Federal Reserve Chairman Jerome Powell defended aggressive action to shield the economy as the coronavirus pandemic took hold. Prices surged at the close, with West Texas Intermediate oil settling 5.3 per cent higher at US$35.49 a barrel, after falling as much as 4 per cent earlier in the day. Futures posted the biggest monthly jump in data going back to 1983.
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The recovery from the lock down mistakes will take some time.  The oil spigot can't just be turned on and off like a water spigot.  This is especially the case with the shale wells.  It may take some innovation to get back up to speed.  And it will have to be done with a smaller work force as the layoff will continue for thousands even after the lock downs are over with.

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