Oil Gains on Slower Production in Wake of Sluggish Demand
- U.S. crude production drops, wells shut, new drilling halted
- Kuwait and Algeria begin their oil output cuts early
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Oil advanced as traders eye a production slowdown that has resulted from the coronavirus-led weaker demand environment.
Futures gained 20% in New York on Thursday. With crude trading below $20-a-barrel, U.S. production has declined rapidly, now at the lowest since last July. Operators in the U.S. have also started to shut in old wells and halt new drilling, actions that could reduce output by 20%. Plus, the number of new wells being brought online is forecast to plunge almost 90% by the end of the year, according to IHS Markit Ltd.