On Wednesday, oil prices hit the highest level in near three months on the back of the prospect of oil output cuts by some of the world’s biggest producers.
At 00.03 GMT, Brent crude oil futures rose by 0.6% or 22 cents to USD39.79/barrel, the highest level since March 6 following the 3.3% gain on Tuesday. Likewise, the US WTI also reached the highest since March 6. It jumped by 0.9% or 33 cents to USD37.14/barrel after soaring by 3.9% in the previous session.
Many countries in the world are easing their coronavirus-related lockdowns, supporting demand for fuels, and led to buoyed prices.
The production cuts pact from the Organization of the Petroleum Exporting Countries and its non-member oil producer allies (OPEC+) has been helping in balancing the oil market. The group is cutting output by 9.7 million bpd for May and June and is on the discussion to prolong it.
Capital Economics estimated demand to gradually recover as lockdown measures continued to be lifted. It expected the global oil consumption in 2020 will average to just under 92 million bpd from 100.2 million bpd last year.
“Oil is likely to end up in a small deficit later this year, which should provide some additional support to prices,” it added.
