By Peter Nurse
Investing.com - Oil markets pushed higher Friday, despite the horrific U.S. jobs data, amid optimism that as lockdown measures are eased and output cut the massive oversupply that caused prices to slump will be corrected.
AT 9:25 AM ET (1325 GMT), U.S. crude futures traded 3.4% higher at $24.34 a barrel, while the international benchmark Brent contract rose 2.6% to $30.20.
Crude also got a boost from Saudi Arabia, the world’s largest exporter, raising its official selling prices, alleviating pressure on global crude pricing.
The U.S. economy shed more than 20 million nonfarm jobs in April, the biggest monthly drop ever, but this has had little impact on the oil market as a huge number had been widely baked into expectations.
Looking at supply, IHS Markit forecasts 17 million barrels a day of liquids output (including nearly 14 million barrels a day of crude oil production) will be cut globally during April-June 2020.
"The Great Shut-In, a rapid and brutal adjustment of global oil supply to a lower level of demand is underway. All producing countries are subject to the same brutal market forces. Some will be impacted more than others. But there is nowhere to hide," said Jim Burkhard, vice president and head of oil markets, IHS Markit.
Nowhere is that pressure more apparent than with the U.S. independent drillers. The number of oil and gas rigs operating in the United States is expected to hit an all-time low this week - reflecting data going back 80 years.
Last week, the total rig count was just four units above the record low of 404 set in May 2016, according to energy service provider Baker Hughes, which has been tracking rig counts since 1940.
This week’s release is due after 1 PM ET (1700 GMT).
“Nascent signs of rebounding gasoline demand in the U.S. and a rapid curtailment of oil production that has seen U.S. producers cut over 1 million barrels per day of output in a matter of weeks has enabled oil prices to recover,” Again Capital’s John Kilduff told CNBC.
The latest data from the Energy Information Administration showed the slowest weekly build since mid-March as domestic output fell further, while crude oil inventory at Cushing, Okla. saw the smallest build since late March.