Oil prices jumped today as a combination of an unexpected rise in Chinese exports and cuts by US producers helped extend a week of gains.
By the mid-afternoon, worldwide standard Brent crude rose a further 5.7 per cent to cement its position above $31.
US benchmark West Texas Intermediate (WTI) leapt 8.9 per cent to $26.10.
After weeks of extreme volatility, oil prices have gained steadily through the first week of May as some countries have begun to relax coronavirus lockdown measures.
An overall rise in the Chinese exports, which confounded analysts who had been expecting a sharp drop, helped push prices higher.
Meanwhile, in the US a number of states relaxed travel restriction, which saw a heightened demand for gasoline as people took to their cars again.
Although crude stocks rose for a fifthteenth straight week, the 4.6m barrel increase was considerably lower than the 7.8m rise that was expected.
In addition, data from independent analysts Rystad Energy showed that at least 616,000 barrels of oil a day will be shut in by US producers in May, rising to 650,000 in June.
The sum is based on guidance from 19 producers, so the full total is probably far higher, analysts said.
Combined with record Opec production cuts, which were set to begin this week, the production curbs have driven prices higher, although supply still significantly outweighs demand.
Oanda’s Criag Erlam said that the rally was “casting huge doubts over a repeat of the WTI May contract expiry fiasco”, when oil prices turned negative:
“Production cuts and soft reopenings all over the place are having the desired effects.
“Inventory data has done little to deter, with the Energy Information Administration reporting an increase of only 4.6m last week, continuing the downtrend.
“The market is gradually moving towards balance but it’s far from there yet and we shouldn’t count on demand too much”.