FX.co ★ Oil Extends Rally

WTI crude oil futures advanced toward the $60 per barrel mark on Wednesday, reflecting a more than 3% increase from the previous session. This upward trajectory is driven by indications of diminished US production alongside a rise in demand from Europe and China. Notably, significant producers like Diamondback Energy and Coterra Energy have disclosed plans to decrease their rig numbers, contributing to the limitation of production. In China, consumer activity saw a significant uptick during the May Day holiday, while European corporations are projected to report first-quarter earnings growth, marking a favorable turn from earlier expectations of a decline. Further boosting this optimistic outlook, reports suggest upcoming discussions between US and Chinese officials this week, raising hopes for reduced tensions between these two major oil consumers. Complementing these developments, data from API indicated a larger-than-expected reduction in US crude oil inventories, showing a decline of 4.5 million barrels last week, surpassing the forecasted 2.5 million-barrel drop.