Oil prices rallied on Thursday amid reports that major oil producers would accelerate planned production cuts to counter demand falloff caused by the coronavirus pandemic. This upward movement came at the end of a wild week in the oil market which saw US WTI collapsing to below zero for the first time in history.
OPEC and other oil producers have committed to lower supply by 9.7 million bpd which has so far given a little impact on prices. However, some producers such as Saudi Arabia and Iraq separately made comments about their readiness to take extra steps to restore the oil market balance. Kuwait said it would reduce imports even before the agreed reduction took effect. Meanwhile, Russia is considering ways to reduce its output and also mulling over burning its crude oil.
Oil prices also received a lift after US President Donald Trump said he had instructed US navy ships to fire on any harassing Iranian vessels in the Persian Gulf. Iran also said it would destroy US warships if they threaten the security in the Gulf.
The international benchmark Brent gained 96 cents (4.7%) to $21.33/barrel, while US WTI futures surged by $2.72 (19.7%) to $16.50/barrel.
