Oil prices moved north on Friday following the lockdown relaxation by more countries in a bid to calm the economic tension brought about by the coronavirus pandemic.
The development has raised the hope of crude demand to start a rebound.
According to the latest market report, Brent crude was up 23 cents (0.8 per cent) to trade at $29.70 per barrel, having fallen nearly one per cent on Thursday.
United States oil gained 25 cents (0.85 per cent) to trade at $29.70 per barrel, after a decline of nearly two per cent in the previous session.
Both contracts are heading for a second week of gains after the lows of April, when U.S. oil crashed below zero, with Brent up around 13 per cent and West Texas Intermediate, also known as Texas light sweet, about 21 per cent higher.
However, crude is still being pumped into storage, raising the prospect that any gain prompted by stronger demand will be capped.
“Oil is rallying on expectations of better demand. There are green shoots there, but I think the market will need to see those broaden and extend to sustain the rally,” said Lachlan Shaw, Head of Commodities Research at National Australia Bank in Melbourne.
On the supply side, North American oil companies are cutting production quicker than Organisation of the Petroleum Exporting Countries officials and industry analysts expected, and are on track to withdraw about 1.7m barrels per day of output by the end of June.
“The supply cuts we have seen announced, particularly in North America, are also giving the market confidence,” Shaw said.
Still, U.S. crude inventories at the Cushing storage hub in Oklahoma increased by around 407,000 barrels in the week through May 5, traders said on Thursday, citing Genscape data.
Australia on Friday became the latest country to plan easing of lockdown restrictions, as infections from the virus slow to a trickle, aiming to relax social distancing restrictions in a three-stage process.
France, parts of the U.S. and countries such as Pakistan are also planning to ease the restrictions instituted to stop the spread of the world’s worst health crisis in a century.
In the U.S., the biggest consumer of oil and its products, motorists are starting to take to the roads as the lockdowns ease.
Gasoline supplied to the U.S. market rose to almost 6.7m barrels per day last week, according to estimates from the U.S. Ene rgy Information Administration