The 20% surge comes as data show storage demand is rising at a slower-than-expected pace.
As the worldwide economy inches toward reopening at a slow pace, oil prices shot up 20% this week, Marketers Insider reports. West Texas Intermediate crude accelerated as much as 20% to hit $18 per barrel, while Brent crude climbed 14% to reach $25.75 per barrel, following recent volatility.
As more countries and states move to ease some coronavirus pandemic restrictions, demand for oil will increase. Demand for oil storage also has slowed this week, according to the U.S. Energy Information Administration (EIA). Inventories only advanced by nine million barrels last week, far below the 10.6 million barrel bump analysts had forecasted.
“Oil continues to notch gains as the risk rally reflects hopes of the global economy opening up sooner and after a smaller-than-feared build in U.S. crude inventories,” said Neil Wilson, market analyst at Markets.com.
Lately, oil prices have swung broadly, with U.S. oil prices last week registering in the negative for the first time in history and Brent plummeting to a 20-year low. The IEA predicted that “energy demand will fall 6% in 2020—seven times the decline after the 2008 global financial crisis.”
Fatih Birol, executive director of the IEA, added, “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”