A rebound in demand or sustained support for oil prices 

International oil prices continued their recent strong rebound on the 19th, rising to the $30 mark, as countries lifted the blockade to spur demand and output from oil producers fell. Marketers expect the short-term oil price rally to continue as a result of reduced production.

As oil prices remain below the profitability of most producers, companies such as Exxon Mobil and EOG Resources are cutting production and closing high-yield wells. While supply is declining, the global anti-epidemic blockade has gradually easing, and some investors expect oil prices to rise over time.

Many oil-producing countries, including Saudi Arabia and Russia, have effectively implemented production reduction agreements beyond market expectations. According to a cut-off agreement between OPEC and non-OPEC producers in April, the group cut 9.7 million barrels per day from May to June and 7.7 million barrels per day from the end of July to the end of the year. Kuwait and the United Arab Emirates followed on may 11 when Saudi Arabia announced an extra 1 million barrels a day of production cuts out of planned production.

OPEC expects non-OPEC countries to reduce crude oil supply by 3.5 million barrels per day in 2020 and 1.5 million barrels per day last month.

According to a May 19 report by the U.S. Energy Information Agency (EIA), shale oil production in seven major U.S. shale basins will fall by a record 197,000 b/d in June, from 8.019 million b/d in May to 7.82 million b/d.

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