Ryan Lance, ConocoPhillips CEO and chairman, joins ‘Power Lunch’ to discuss the collapse of oil prices, where his company is storing oil and how they’re weathering the crisis caused by the coronavirus pandemic.
Oil prices jumped more than 20% on Wednesday after data showed a smaller-than-expected build in U.S. inventories, as well as on the hope that economies will reopen sooner than expected.
West Texas Intermediate for June delivery surged 22.04%, or $2.72, to settle at $15.06 per barrel, after earlier trading as high as $16.78. International benchmark Brent crude gained $2.08, or 10.17%, to settle at $22.54 per barrel.
Optimism that economies will be able to re-open ahead of schedule rose after Gilead said early results of its coronavirus drug trial showed that at least 50% of patients treated with a five-day dosage of antiviral drug remdesivir improved and more than half were discharged from the hospital within two weeks.
Stocks rose following the news, despite a 4.8% contraction for U.S. GDP in the first quarter — the largest contraction since the financial crisis.
Oil prices also got a boost on a smaller-than-expected build in U.S. inventories. According to data from the U.S. Energy Information Administration, crude stockpiles rose by 9 million barrels for the week ending April 24. This was lower than the 11.7 million barrel build analysts polled by FactSet had been expecting.
The data also showed that U.S. production fell by 100,000 barrels per day last week to 12.1 million bpd. This is 1 million bpd below the record 13.1 million bpd production set during the week ending March 13.
“Oil prices rose on Wednesday morning as traders cling to potentially positive indications that the demand-supply gap may somewhat become smaller soon,” Rystad Energy’s global head of oil markets Bjornar Tonhaugen told CNBC.
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