Spot Cargo Markets-Brent Nudges $40/bbl

摘要

International pricing benchmark Brent flirted with $40 per bar-rel last week for the first time since Covid-19 crashed the oil market in March. Prices crept higher as crude heavyweights Saudi Arabia and Russia pushed for an extension of the record 9.7 million barrel per day output cuts that were agreed by Opec-plus back in April beyond the end of June. Brent finished at $39.99/bbl Thursday, up $4.70/bbl on the week, while US domestic price-pin West Texas Intermediate gained $3.70/bbl to close at $37.41/bbl. The rally ran out of steam Thursday, after plans for an online meeting that day were delayed amid a row about poor compliance by some producers. Opec-plus talks are now back on for Saturday Jun. 6. Russia only wants to extend the deal by another month in any case, amid concerns that a longer cut would just hand more market share to price-responsive US shale producers. Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend their voluntary additional output cuts of 1.18 million b/d after June, meaning that crude supply could rise next month regardless of any Opec-plus deci-sion. Oil demand is returning as more countries ease their Covid-19 lockdown restrictions, but bloated stocks continue to weigh on crude and product markets alike. And the recovery in jet demand is seriously lagging a rebound for road transport fuels-gaso-line and diesel. New data from the International Air Transport Association (IATA) released Jun. 3 show daily flight totals rising 30% from the lowest point on Apr. 21 to May 27. Passenger demand plunged 94.3% in April compared to last year while IATA notes that most of the recovery this month has been in domestic not international air travel (p1).