Oil prices surge again US stockpiles grow less than feared, output cuts kick in

TOKYO, May 1 (Reuters) - Oil prices jumped on Friday,
extending the previous session's gains, buoyed by a
lower-than-expected gain in U.S. crude inventories and the start
of output cuts in a bid to offset a slump in fuel demand
triggered by the coronavirus pandemic.
Brent crude LCOc1 for July delivery, which started trading
on Friday as the new front-month contract, was up $1.10, or
4.2%, at $27.58 a barrel by 0013 GMT. Brent gained 12% on
Thursday.
U.S. crude CLc1 for June delivery climbed $1.37, or 7.3%,
to $20.21 a barrel, having gained 25% in the previous session.
"This is a second straight week of inventory and product
demand figures suggesting a bottoming of the U.S. market," said
Stephen Innes, chief market strategist at AxiCorp.
U.S. Energy Information Administration data showed crude
inventories rose by 9 million barrels last week to 527.6 million
barrels, less than the 10.6 million-barrel rise analysts had
forecast in a Reuters poll. EIA/S
The other significant support factor on Friday was the
official start of output cuts agreed between the Organization of
the Petroleum Exporting Countries (OPEC) and other major
producers like Russia - a grouping known as OPEC+ - to counter
sliding demand.
"OPEC+ quotas are due to kick in on Friday, suggesting
short-term supply conditions have likely peaked," AxiCorp's
Innes said.
The OPEC+ deal covers a cut in production of nearly 10
million barrels per day (bpd), a record level.
That, nevertheless, falls well short of the roughly 30
million bpd of demand that has evaporated amid the coronavirus
pandemic as much of the world's population remains under some
form of economic and social lockdown.


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FACTBOX-Oil analysts cut outlook for prices and demand as virus
bites cut output as virus hits fuel demand, oil
prices fall oil companies cut capex by 25% on crude price
crash ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>