Crude oil advanced to around $40 a barrel in New York as trading houses Vitol SA and Trafigura Group said global demand is recovering rapidly from its lows in April.
Vitol, the world’s largest independent oil trader, estimates that global oil use is rising by 1.4 million barrels a day every week in June, taking this month’s growth to more than 5.5 million barrels
“Our short-term tracking of demand confirms a healthy demand recovery from the lows of April,” Chief Economist Giovanni Serio said. “China led the recovery in April and May and in the past couple of weeks, U.S. and European countries have followed.”
Trafigura said global oil demand is now about 10 million barrels a day below pre-crisis levels, a significant improvement from the about 30 million barrels a day it estimated for a brief period in late March and early April.
“Oil demand is creeping back,” said Ben Luckock, co-head of oil trading at the second-largest trader. “Globally, we are probably back to 90% of normal levels, but the exact percentage varies with the location.” Chinese oil demand is back to levels before the coronavirus, he said.
An advance in crude oil above $40 will be positive for the economy of Nigeria, which is Africa’s largest oil producer.