Oil prices rose to the highest level since March on Thursday, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease restrictions imposed on people's movements due to the coronavirus crisis.
Crude prices have slumped in 2020, with Brent hitting a 21-year low below $16 a barrel in April as demand collapsed. With fuel use rising and more signs that the supply glut is being tackled, Brent has since more than doubled.
Brent rose 31 cents, or 0.87%, to settle at $36.06 per barrel, while West Texas Intermediate crude gained 43 cents, or 1.28%, to settle at $33.92 per barrel.
"Global supply has been curtailed to a great degree," said Rystad Energy analyst Paola Rodriguez Masiu. "We are on a clear path to a gradual recovery now."
In the latest sign the supply glut is easing, U.S. crude inventories fell 5 million barrels last week. Analysts had expected an increase.
"The rally in the crude futures is beginning to approach levels in which U.S. shale production declines will begin to slow and possibly reverse as low cost producers attempt to generate revenue," Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
At the same time, there is evidence of recovering fuel use.
Top U.S. airlines and Air Canada (AC.TO) on Tuesday reported slower ticket cancellations and an improvement in bookings on some routes, though executives said overall demand remained weak.
The Organization of the Petroleum Exporting Countries, Russia and other allies, known as OPEC+, agreed to cut supply by a record 9.7 million barrels per day from May 1.
So far in May, OPEC+ has cut oil exports by about 6 million bpd, according to companies that track the flows, suggesting a strong start in complying with the deal. OPEC says the market has responded well.