WTI crude futures rose more than 1.5% to above $114 per barrel on Wednesday, recovering from a 1.6% drop in the previous session, amid hopes of demand recovery in China as the country relaxes some of its strict Covid-19 restrictions and expects to return to “normal life” on June 1. Also, Russia’s production fell by nearly 9% in April, 1.28 million bpd below its OPEC+ designated output quota as producers have started to shut in some wells as buyers in the West are increasingly shunning Russian crude amid the Ukraine war.
Elsewhere, industry figures from API showed US crude and gasoline stocks fell last week, supporting bullish sentiment. Meanwhile, oil prices are facing pressure following reports that the US is allowing Chevron Corp to negotiate oil licenses with Venezuela’s national producer, temporarily lifting a US ban on such discussions. Diplomats from the EU also pointed to a May 30-31 summit as the moment for agreement on a phased ban on Russian oil.