Singapore — 0200 GMT: Crude oil futures continued to move higher in mid-morning trade in Asia Monday, extending last week's rally, amid improving demand and supply prospects.
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At 10 am Singapore time (0200 GMT), ICE Brent July crude futures were up $1.26/b (3.88%) from Friday's settle at $33.76/b, while the NYMEX June light sweet crude contract was $1.26/b (4.28%) higher at $30.69/b.
Front-month WTI closed Friday at a two-month high and Brent at its highest since April 8.
"Oil demand is recovering in a V shape fashion as massive oil-importing economies carry on with restarting activity, and as OPEC + and G20 producers show an unparalleled commitment to supply discipline," AxiCorp chief global markets strategist Stephen Innes said in a note Monday.
China's crude demand showed signs of improvement as its domestic COVID-19 restrictions eased, with refinery crude throughput posting the first uptick since the outbreak.
Crude oil throughput at China's domestic refineries edged up 0.8% year on year to 13.16 million b/d or 53.85 million mt in April, the country's National Bureau of Statistics data showed.
Bullish US crude inventory data from the Energy Information Administration last week and the recent downtrend in the US oil rig count also indicated that US supply is falling.
"US supply is showing signs of slowing, with another 34 drill rigs idled. This takes the current total to a level not seen since the beginning of last decade when the shale revolution began," ANZ analysts said in a note Monday.
"We expect US shale production to fall at least 1.5 million b/d as a consequence of the fall in drilling activity and subsequent cuts to capital expenditure," the analysts said.
As this week progresses, investors will be closely monitoring fresh US inventory data, as well as updates from several key market participant countries in Asia on easing COVID-19 restrictions, to gauge if the recovery can be sustained.