(Bloomberg) -- Oil climbed above $30 a barrel in Asia for the first time in more than two months after OPEC said it was hopeful that the worst of the coronavirus-induced market turbulence was over, and as U.S. producers continued to slash their activity.
U.S. futures rose as much as 2.5%, after gaining 19% last week. Mohammad Barkindo, the secretary-general of the Organization of Petroleum Exporting Countries, said in a Bloomberg Television interview that the outlook for the market in the second half of the year was looking more encouraging as the global economy recovers.
Production cuts across the globe are helping to rebalance the market following the demand shock caused by Covid-19 lockdowns. The number of drilling rigs in the U.S. fell by another 34 last week to levels not seen since before the shale revolution kicked off at the beginning of the last decade, while stockpiles at the key U.S. storage hub in Cushing, Oklahoma, shrank for the first time since late February.
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OPEC+ is responding to the oil market’s collapse with an urgency never seen before. The alliance’s program of production cutbacks this month is well on the way to trimming 9.7 million barrels of daily crude output -- roughly 10% of global supplies, according to tanker-tracking data, interviews with physical crude traders and refiners, and assessments by consultants.
Iraq, OPEC’s second-biggest producer, plans to halt output from the southeastern oil field of Al-Ahdab due to protests that are blocking operations, according to a person with knowledge of the situation.
The market largely shrugged off U.S. Federal Reserve Fed Chairman Jerome Powell’s warning late Friday that stocks and other assets that have rallied sharply in the past month would suffer “significant declines” if there were setbacks in the fight to contain the virus.
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