19.05.202019:41:00UTC+00Oil Settles Higher Amid Slightly Fading Worries About Demand

Crude oil prices climbed higher on Tuesday, supported by increased demand and output cuts, on the expiration of the front-month contract.

With several countries across the globe relaxing lockdown restrictions and reopening their economies, energy demand has picked up a bit.

West Texas Intermediate Crude oil futures expired at $32.50 a barrel, gaining $0.68, or about 2.1% for the session.

July series WTI contract advanced $0.31, or about 1%, to settle at $31.96 a barrel.

On Monday, WTI futures for June had surged up 8.1%, and July contract had moved up 7.2%.

Brent crude futures ended down $0.16, or 0.45%, at $34.65 a barrel.

Although demand is expected to pick up further, a steep climb appears somewhat unlikely amid concerns about a potential second-wave of virus outbreak in some parts of the globe.

What could support the prices is the possibility of more output cuts by some major oil producers in the coming months. OPEC+ has cut its oil exports sharply in the first half of May and more voluntary cuts are expected in June.

Analysts also expect a deep production cut in U.S. shale in the second quarter due to low demand, high inventories, and low oil prices.