Oil prices settle mixed as output cuts, demand recovery in focus

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NEW YORK, May 19 (Xinhua) -- Oil prices settled mixed on Tuesday as market participants eyed signs of production cuts while weighing the possibility of a recovery in crude demand.

The West Texas Intermediate for June delivery increased 0.68 U.S. dollar to settle at 32.50 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery fell 0.16 dollar to close at 34.65 dollars a barrel on the London ICE Futures Exchange.

The moves followed a noticeable rally in the previous session, with the U.S. oil benchmark up 8.12 percent and the international benchmark ending more than 7 percent higher.

"There are plenty of reasons for prices to recover, e.g. the pronounced decrease in OPEC+ production and export volumes and the apparent recovery of demand," Eugen Weinberg, energy analyst at Commerzbank Research, said in a note on Tuesday.

Demand should have bottomed out by now as more and more countries are gradually lifting the strict lockdown measures, according to analysts.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed to cut output by 9.7 million barrels per day for May and June, aiming to tackle a global supply glut on the back of the COVID-19 crisis.

Meanwhile, oilfield services company Baker Hughes said in a recent report that the number of active U.S. rigs drilling for oil plummeted from 292 to 258, the lowest figure since July 2009. Enditem

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