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* U.S. crude inventories drop by 5 million barrels
* OPEC says market responding well to record supply cut
* Brent, U.S. crude hit highest since March 11
(Updates prices)
By Alex Lawler
LONDON, May 21 (Reuters) - Oil prices rose on Thursday to
their highest since March, supported by lower U.S. crude
inventories, OPEC-led supply cuts and recovering demand as
governments ease restrictions on people's movements imposed due
to the coronavirus crisis.
Crude prices have slumped in 2020, with global benchmark
Brent hitting a 21-year low below $16 a barrel in April as
demand collapsed. With fuel use rising and more signs that the
supply glut is being tackled, Brent has since more than doubled.
Brent crude for July rose $1.17, or 3.3%, to $36.92
per barrel by 1340 GMT. U.S. West Texas Intermediate crude
climbed 96 cents, or 2.9%, to $34.45. Both benchmarks are
at their highest since March 11.
"Global supply has been curtailed to a great degree," said
Rystad Energy analyst Paola Rodriguez Masiu. "We are on a clear
path to a gradual recovery now."
In the latest sign the supply glut is easing, U.S. crude
inventories fell by 5 million barrels last week.
Analysts had expected an increase.
At the same time, there is evidence of recovering fuel use.
British airline easyJet plans to restart some flights on
June 15, pointing to higher jet fuel demand.
Physical crude markets, at historic lows just weeks ago, are
also rising.
"It is now abundantly clear that the market is tightening
and crude prices are rebounding as demand returns," said
analysts at JBC Energy.
The Organization of the Petroleum Exporting Countries,
Russia and other allies, known as OPEC+, agreed to cut supply by
a record 9.7 million barrels per day (bpd) from May 1 to support
the market.
So far in May, OPEC+ has cut oil exports by about 6 million
bpd, according to companies that track the flows, suggesting a
strong start in complying with the deal. OPEC says the market
has responded well.
(Additional reporting by Yuka Obayashi; editing by Jason Neely,
Kirsten Donovan)
