Oil prices steady amid signs of demand coming back after coronavirus

By Aaron Sheldrick
TOKYO, June 23 (Reuters) - Oil prices were steady on
Tuesday, holding onto the previous session's gains, amid more
signs of fuel demand picking up after the depths of the
coronavirus pandemic as major crude producers continue to stick
to supply cuts.
Brent crude was up 6 cents at $43.14 a barrel at 0046 GMT,
after gaining 2.1% on Monday. U.S. oil CLc1 was up 8 cents at
$40.81 a barrel, having risen 1.8% in the previous session.
"We're starting to see the green shoots of recovery," Exxon
Mobil Australia Chairman Nathan Fay said at Credit Suisse's
annual Australian energy conference on Tuesday, referring to oil
demand's recovery from the collapse triggered by
anti-coronavirus lockdowns.
The reopening of some U.S. states and countries around the
world after lockdowns has helped sustain oil's recent rally as
demand for fuel returns. In New York, streets were clogged with
traffic as the worst affected city in the United States emerged
from more than 100 days of lockdown.
On the supply side, meanwhile, U.S. and Canadian oil and gas
drillers cut the number of the rigs they are operating to a
record low. That leaves them with a steep slope to scale towards
recovery in output even with higher prices to spur them on.
"U.S. onshore production has now given up two full years of
(volume) gains," said Stephen Innes, chief global markets
strategist, at AxiCorp. "It supports the market supposition that
even with a rebound in price, the capital investment that
had already been tapering off in Q1 isn't flowing back quickly."
U.S. oil rigs contracted for drilling dropped by 10 to 189
last week, their lowest since June 2009, according to weekly
data from energy services firm Baker Hughes Co. RIG/U
Gas rigs fell by three to 75, the lowest on record according
to data going back to 1987.
Also supporting prices are indications that members of the
Organization of the Petroleum Exporting Countries (OPEC) and
allies in a grouping known as OPEC+ are complying with agreed
record production curbs to balance the market is also a support
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GRAPHIC: U.S. crude oil drilling rigs https://tmsnrt.rs/2Z1Z3LZ
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