Global Oil Markets Poised for Rebalancing, an Industrial Info Market Brief

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For the first time in a few months, oil trading has found stability through recent crude price increases driven mainly by the following factors:

• OPEC+ cutting crude oil production output by roughly 9.4 million barrels per day (BBL/d) in May.
• Drilling by U.S. shale oil wells falling to two-year lows of barely 7.63 million BBL/d.
• A decrease in U.S. crude oil output by approximately 2 million BBL/d.
• A steady demand recovery in China, with oil consumption now almost back to pre-pandemic levels.
• A rise in U.S. consumption demand, with fuel being more expensive for immediate delivery in the wholesale market versus forward contracts, a sign of demand strength.

Unless there is a second wave of COVID-19-induced lockdown globally, which could destroy global demand anew, oil prices are expected to hold firm and steady, for now.