Oil Prices Inch Higher, Capped By Uncertainty – 20 May, 2020

Oil prices managed to inch higher on major output cuts and a drop in U.S. inventory, however gains were still capped as uncertainty over the future of demand remains on the forefront of many investors minds. Brent crude futures rose 0.9% or 33 cents to $36.08 per barrel for July delivery. U.S. West Texas Intermediate crude futures traded 0.6% or 20 cents higher to $33.69 for July. Despite a Reuters poll predicting a 2.1 million barrel rise, U.S. inventories fell by 5 million barrels last week. OPEC and Russia have held up their agreement to cut production as data shows they have been cutting supply by 9.7 million barrels per day. Markets are starting to reflect a shift from a mass oversupply that was dragging prices down at the beginning of April towards an undersupply for the second half of the year. Oil prices had started to rise as investors predicted demand would grow as countries eased lockdown restrictions, though the fears of uncertainty over the global economic outlook still linger.