Meanwhile, Eurozone industrial activity skyrockets: File Image/PixaBay
The Organization of the Petroleum Exporting Countries' (OPEC) decision on Thursday to ease production cuts between May and July caused a surge of activity in crude trading circles; this, along with news of strong manufacturing activity in Europe despite a new round of Covid lockdowns, caused crude prices to leap by over 3 percent.
Brent rose $1.94, or 3.1 percent, to $64.68 per barrel by 1:25 p.m. EST (1825 GMT); West Texas Intermediate rose $2.10, or 3.6 percent, at $61.26 per barrel.
OPEC and its allies, including Russia, will ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June, and further 400,000 bpd or so in July; under this deal, the cuts would be just above 6.5 million bpd from May, compared with slightly below 7 million bpd in April.
Prince Abdulaziz bin Salman, energy minister, Saudi Arabia
The OPEC+ cautious position was the correct course of action
It was a show of confidence for global economic recovery, but Prince Abdulaziz bin Salman, energy minister for Saudi Arabia, said, "The market now realizes that the OPEC+ cautious position was the correct course of action...the reality that remains [is the] global picture is far from even and the recovery is far from complete."
At the meeting, Alexander Novak, deputy prime minister of Russia, said he expected global oil demand to grow by 5-5.5 million bpd this year; this nod to demand recovery seemed to be supported by March data revealing that euro zone factory activity growth rocketed at its fastest pace in the history of the survey, recovering most of its lockdown driven losses and defying analytical consensus that rising Covid rates would severely compromise such activity.
Meanwhile, oil drilling reportedly expanded in the U.S. at its fastest pace since the start of the pandemic, thanks to rising prices and demand optimism; according to Baker Hughes data released Thursday, the total number of rigs searching for oil across the country rose by 13 this week to 337, the largest jump since January 2020.
Despite ongoing media and analytical concerns over Covid, Jeff Currie, head of commodities research at Goldman Sachs Group Inc., displayed clear-cut enthusiasm for 2021 market conditions when he said in a Bloomberg Television interview, "The [supply] deficit that we're already in is likely to accelerate," the demand numbers are "rock solid in the U.S.," and the lockdowns in Europe present only a "temporary speed bump."