Brent crude rose by 5.4% on Friday to its highest level since March. This growth was based on the growing demand for fuel, as nations around the globe eased travel restrictions, which they had imposed to limit the spread of COVID-19.
Brent crude settled up by $1.71, or 5.49% a barrel at $32.84, from Thursday when it surged by nearly 7%.
The price of crude has been rising in recent days as OPEC+ (a group composed of OPEC, Russia, and other oil producers) recently agreed to reduce the oil glut in the energy market, coupled with the fact that demand has picked up.
“Oil prices have been up significantly since yesterday thanks to a better assessment of the situation by the International Energy Agency (IEA),” Commerzbank told Reuters.
However, the global oil market remains cautious with COVID-19 pandemic far from being over and new caseloads reported in countries where lockdowns had eased.
“The fundamentals in the market are clearly improving,” ING Research analysts said in a note to CNBC. “But we still believe that in the near term, the upside is limited given that we are still in a surplus environment … There is plenty of inventory for the market to digest.”
Meanwhile, U.S. crude oil inventories dropped for the first time in 15 weeks, the Energy Information Administration said on Wednesday.
Crude oil output cuts will boost the trend towards lower inventories; however, U.S. crude oil is unlikely to see strong gains as Brent crude.
“WTI crude will struggle to break above the $30 level until both the economic outlook improves for the U.S. and some of the downside risks ease,” said Edward Moya, senior market analyst at OANDA.