Oil prices rise with around $1 a barrel on Tuesday as more nations ease lockdown ahead of the OPEC+ meeting.
A new hope has been raised in the oil sector on major producers to extend the ongoing impression production cuts during a video conference likely to be held this week and as countries begin to reopen after coronavirus lockdowns.
Brent crude rose 3.1 per cent ($1) to $39.32 a barrel by 1:32 p.m. EDT (1732 GMT). West Texas Intermediate crude climbed 3.1 per cent ($1.09) to $36.53 a barrel. Both benchmarks were at near three-week highs.
The Organisation of the Petroleum Exporting Countries and others including Russia, a grouping known as OPEC+, are considering extending their production cuts of 9.7m barrels per day (about 10 per cent) of global production, into July or August, at a meeting expected to be held on Thursday.
“This week’s focus is seeing a shift towards a combined Saudi-Russia effort to extend current substantial production cuts across the summer period in further reducing a substantial supply glut,” said Jim Ritterbusch of Ritterbusch Oil Associates.
Under the original OPEC+ plan, the cuts were due to run through May and June, scaling back to a reduction of 7.7mbpd from July to December. Saudi Arabia has been pushing to keep the deeper cuts in place for longer, sources said. The gradual re-opening of businesses in a growing number of U.S. states and countries around the world after shelter-in-place mandates caused by the coronavirus pandemic also boosted oil prices.
“As the economy opens up, there is more and more people on the road. That’s going to be good, obviously, for crude oil,” said Bob Yawger, director of energy futures at Mizuho in New York.
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