Column: Oil prices transitioning to next phase of cycle - Kemp - Reuters

Column: Oil prices transitioning to next phase of cycle - Kemp - Reuters:

Brent futures prices have risen by more than 80% over the last two months, the fastest increase at any point for more than a quarter of a century, as the market has rebounded from its worst crisis in decades.

Front-month Brent futures have averaged nearly $42 per barrel over the last five trading sessions, compared with less than $23 over the same period in late April, based on daily closing prices from ICE Futures Europe.

Global oil consumption has started to recover as economies emerge from lockdown while production has plunged as a result of policy-driven cutbacks by OPEC+ and price-driven cuts by U.S. shale producers.

The global market has likely moved from a large production surplus in late April into a small production deficit by late June, which will draw down excess inventories and push spot prices to a premium.