Crude Oil Prices Jump 10% On Signs Of Demand Recovery

On Thursday, oil prices rose over 10 percent in the international market on signs of recovery in demand in the US. It is the second consecutive session of gains for the crude oil benchmarks that had experienced major plunge last week.

The US benchmark West Texas Intermediate (WTI) crude futures climbed to a high of $17.35 a barrel, up by 14.3 percent after surging 22 percent on Wednesday. Global benchmark Brent crude rose 10.3 percent to $24.87 a barrel and had gained 10 percent on the previous trading day.

A Reuters report said that rising trend is a reflection of US crude inventories growing at a slower than expected pace and rise in demand for gasoline in the world's largest economy.

According to data released by US Energy Information Administration, crude stockpiles rose by 9 million barrels last week to 527.6 million barrels when compared to the analysts' poll estimation of 10.6 million-barrel. Further, US gasoline stockpiles dropped by 3.7 million barrels from record highs the previous week as a slight rise in fuel demand offset a rebound in refinery output.

"In the current environment, the market appears desperate for any positive signs, no matter how mild they seem. The focus this week has been on inventory and demand numbers from the U.S.," ING's head of commodities strategy told Reuters.

Last week, US WTI plunged into the minus territory for the first time ever on its May contract edging closer to expiry with practically no deliveries to make amid massive fall in demand due to the pandemic.

This week, optimism is also been seen in the equity markets as China continues lifting restrictions on retail outlets and manufacturing units in some parts of the country.

Meanwhile, petrol and diesel prices in major cities of India remained unchanged for the 45th straight day on Thursday. These rates are revised on a daily basis by state-owned oil retailers, however, they have been the same as that on 14 March

There was also hopeful news on the COVID-19 front that helped oil prices gain this week. Gilead Sciences said on Wednesday that its preliminary trials of antiviral drug remdesivir had shown some evidence of helping COVID-19 patients recover faster.

Meanwhile, Pfizer said its vaccine may be available for emergency use by the end of the year, which comes two days after researchers at Oxford University also said that their vaccine has shown promising results in animal trials and the Serum Institute of India (world's largest maker of vaccines by volume) plans on producing up to 60 million doses of this vaccine within months.