With gasoline demand on the increase as the restrictions caused by the COVID-19 pandemic are being eased, oil prices rose 5% in the U.S. on Friday, reaching more than $35 a barrel, their best month on record.
West Texas Intermediate crude, set at the Cushing hub was up $1.78 or 5.28%, settling Friday at $35.49 a barrel in trading on the New York Mercantile Exchange. However, it is still 46% less than the January high of $65.65 a barrel.
But the WTI prices were still better than the Brent futures crude oil traded on the ICE futures in Europe as Brent could only improve 4 cents, finishing the day at $35.33 a barrel.
“It certainly doesn’t feel like it was oil’s best month ever,” said Regina Mayor, KPMG’s global head of energy according to CNBC News. “Low $30s for WTI is clearly better than where we were at the end of April, but it’s not sufficient enough to bring the bulk of production back online.”
Analysts believe the jump in oil prices on the last trading day of the month was the result of an uptick in gasoline demand along with record supply cuts. WTI finished the May with a gain of 88% for the month.
But experts are quick to note that the surge in prices follows the steepest downturn on record, and that oil still has a ways to go before it regains old highs. In other words, WTI at $35 per barrel is hardly something to celebrate.
Since then, things have started to improve. Data released by the U.S. Energy Information Administration on Thursday showed that for the week ending May 22 gasoline demand rose to 7.3 million barrels per day from the prior week. This marked an improvement, although was still below 2019′s number ahead of Memorial Day weekend, which was 9.4 million bpd. Storage in Cushing, Oklahoma — the main delivery point for WTI — decreased by 3.4 million barrels, and refinery utilization also rose to 71% from 69%. Overall inventory rose by 7.928 million barrels, compared with the 1.3 million barrel draw analysts had been expecting, according to FactSet.
Natural gas prices on the NYMEX rose only 2 cents in Friday’s trading, ending the day up 1.2% at $1.85 per MMBtu.
As for local stocks and those with definite Oklahoma connections, Chesapeake Energy dropped 30 cents for a 2.26% decline, ending the day at $13.01 a share.
ConocoPhillips fell 83 cents or 2% and finished Friday at $42.18. Devon Energy was down 85 centers or 7.2% and settled at $10.81.
Marathon Oil was off 36 cents for a 6.3% drop and ended at $5.34 while EOG Resources fell 67 cents to $50.97 a share.
ONEOK dropped 59 cents to $36.69 while Phillips 66 declined 30 cents to $78.26 a share.
American Electric Power, on the heels of winning more approval of a massive electric project involving three Oklahoma wind farms rose 15 cents and finished the day at $85.25 a share.