Oil prices rise on demand prospects as lockdowns start to ease

By Sonali Paul
MELBOURNE, May 5 (Reuters) - Oil prices climbed in early
trade on Tuesday, adding to gains in the previous session, on
expectations that fuel demand will begin to pick up as some U.S.
states and nations in Europe and Asia start to ease coronavirus
lockdown measures.
West Texas Intermediate (WTI) crude CLc1 futures rose as
much as 8.2% to a three-week high of $22.06 and were up 7.6%, or
$1.55, at $21.94 at 0108 GMT. The U.S. benchmark is on a
five-day win streak that started on April 29.
Brent crude LCOc1 futures hit a high of $28.37 a barrel in
early trade and were up 4.1%, or $1.12 cents, at $28.32. Brent
is up for a sixth straight day.
Both benchmark contracts rose about 3% on Monday.
Prospects improved for fuel demand as some U.S. states and
several countries, including Italy, Spain, Portugal, India and
Thailand, began allowing some people to go back to work and
opened up construction sites, parks and libraries. "Considering ... the depths of demand destruction, markets
are probably inclined to take any good news relatively quickly,"
said Daniel Hynes, senior commodity strategist at Australia and
New Zealand Banking Group.
Global oil demand probably collapsed by as much as 30% in
April, analysts have said, and the recovery is likely to be
slow, especially with airlines expected to remain largely
grounded for months to come.
Australian national carrier Qantas Airways' QAN.AX Chief
Executive Alan Joyce said on Tuesday that "international travel
demand could take years to return to what it was." With Saudi Arabia, Russia other major producers and
companies slashing output, the market shrugged off a decision by
the Texas energy regulator to cancel a vote on mandating a 20%
output cut in the United States' biggest oil-producing state.
The Texas Railroad Commission had been due to hold the vote
on Tuesday, but Commissioner Ryan Sitton was unable to win
support from his fellow commissioners for the plan. The proposal
was strongly opposed by oil trade groups and major shale
producers. "The intent in itself was positive - but it was always going
to be a long shot," Hynes said.