As more countries joined reducing the production along with the big oil producers and eased deadlocks aimed at stopping the coronavirus pandemic, US producers dropped the number of drilling rigs to a record low and oil prices rose 5% on Friday, a second consecutive week.
With the energy industry lowering supply and efforts to cope with the coronavirus-led collapse in fuel demand, the number of oil and gas drilling facilities dropped 34 pieces this year to 374 in total, the all-time low.
North American oil companies have cut production quicker than analysts predicted, and by the end of June, around 1.7 million barrels (bpd) of production have been withdrawn and continue to pull.
Brent crude settled up $1.51, or 5.1%, at $30.97 a barrel. U.S. West Texas Intermediate crude futures (WTI) gained $1.19, or 5%, to $24.74 a barrel.
Both contracts posted a second week of gains, with Brent advancing over 18% this week and WTI up about 33%.
Meanwhile, there are those who doubt the exit of the last weeks. It is said that a coronavirus cases continue to increase and the US crude oil surplus is steep, while a record US stock level is likely to be reached in the report of the US Energy Information Administration to be held next week. Inventory shows that since the record accumulation of 19 million barrels at the beginning of April, crude oil stocks have increased 15 consecutive weeks, although the growth rate in stocks has slowed.
Despite doubts remain whether the allies known as the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led OPEC + will comply with the record 9.7 million bpd production cuts started this month, the group appears complying the production cuts with more participation than expected.
The ones considering doubtful, think the group will not pursue this attitude much longer and the price will be pulled back to around $ 20 a barrel.
Iraq has not yet informed regular oil buyers about export cuts, and says it is under pressure of supply cut implement.
In this case, if one or more countries do not act cooperatively, the door may open for others.
On Friday, Australia was the last country to plan to alleviate deadlocks, while countries such as France, some states in U.S., and Pakistan also plan to ease the restrictions.