US oil futures have closed out May with record monthly gains, on hopes that the US-China trade deal would remain intact and on falling crude production.
West Texas Intermediate crude futures for July delivery settled at $US35.49 a barrel, jumping $US1.78, or 5.3 per cent.
July Brent crude closed at $US35.33 a barrel, gaining 4 US cents. However, the more active August contract ended at $US37.84, rising $US1.81, or roughly 5 per cent.
Both benchmarks saw steep monthly rises due to falling global production and expectations for demand growth as parts of the United States, including New York City, and other countries move to reopen after coronavirus-related lockdowns.
WTI recorded an all-time monthly rise of 88 per cent after trading negative last month. Brent logged an increase of about 40 per cent for its strongest monthly bounce since March 1999.
US President Donald Trump said his administration will begin to eliminate special treatment for Hong Kong in response to China plans to impose new security legislation in the territory, but he did not say the first phase of the Washington-Beijing trade deal was in jeopardy.
That put oil investors, worried that a breakdown in trade relations would further hurt oil consumption, at ease.
“There was a lot of nervousness going into this press conference, so it looks like the worst case scenario doesn’t appear to be emerging,” said John Kilduff, a partner at Again Capital Management in New York.
Oil was also supported by a record-low number of US and Canadian oil and gas rigs, which indicates a further drop in supply out of the world’s biggest crude producer.
The US oil and gas rig count fell by 17 to an all-time low of 301 this week, according to data from energy services firm Baker Hughes going back to 1940.