NYMEX WTI Nears $26

WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange rallied in early trade Thursday on reports Saudi Arabia raised its official selling price for June crude exports to Asia. Overnight trade data from China indicating a strong rebound in crude imports by the world's top oil importer amid a demand recovery following a coronavirus-led lockdown also was bullish.

Saudi Aramco announced Thursday it would raise most June pricing for Asian crude buyers by $1.40 to $6.50 barrel (bbl). Sources indicated Saudi Arabia plans to cut its crude exports to a decade-low 6 million barrels per day (bpd) this month, with 4 million bpd of that total committed to Asia.

China reported crude imports reached 9.84 million bpd last month, an increase from the 9.68 million bpd imported in March. For the first four months of the year, crude imports averaged 10.11 million bpd, 1.7% higher than the comparable period a year earlier. Wire services reported independent refiners in the world's second largest economy are ramping up crude throughputs, up 28% from mid-February to over 70% during the last week of April.

Traffic data supports the view of a strong rebound in China's fuel demand, with a weekday mobility index in large cities of Beijing, Hong Kong and Shenzhen roughly returning to pre-pandemic levels.

Overall exports from China, including refined products, also rose 3.5% last month against expectations of a 15.7% drop. As factories and refineries reemerged from months-long lockdown, China's economy seemed to be quickly picking up speed.

The stronger-than-expected overnight reading from China boosted global stocks from Europe to Asia. Futures tied to Dow Jones Industrials look for a higher open of 270 points and the S&P 500 for a 1.3% gain.

In early trading, NYMEX June West Texas Intermediate futures surged $2.27 to $26.25 barrel (bbl), with Brent crude for July delivery surging $1.87 to near $31.59 bbl. NYMEX June RBOB futures rallied 6.42 cents to $0.9411 gallon, near a fresh eight-week spot high $0.9441 gallon. NYMEX June ULSD futures reversed higher to $0.8700 gallon after plunging over 8% session prior.

Markets now await for a fresh reading on weekly unemployment data in the United States due out 8:30 a.m. EDT. Consensus calls for 3.041 million Americans to have filed for unemployment benefits for the first time in the week ended May 2, which follows 3.839 million initial jobless claims reported in the prior week. April's unemployment rate is expected to skyrocket to 16.4%, the highest on record with data going back to 1948. Markets expect profound payroll contraction with 21.5 million newly unemployed in April following a 701,000 plunge in March.

Liubov Georges can be reached at liubov.georges@dtn.com

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