Tuesday, May 26, 2020

Oil's Roaring Comeback

Back in April, the U.S. oil benchmark, West Texas Intermediate crude, plunged below zero and into negative territory for the first time on record. But May is shaping up to be WTI’s best month ever on a percentage basis, going back to its inception in 1983.

WTI has jumped more than 70 percent in May and posted four straight weeks of gains. Chinese demand for oil in April rebounded to 89 percent of what it was a year earlier, according to IHS Markit, and the firm expects May demand to be 92 percent of 2019′s level. China is the world's largest importer of oil.

Remember, though, part of WTI’s rally this month is due to the historic low from which it bounced. Prices are still about 50 percent below January’s high of $65.65.

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