On Tuesday, oil prices rose on hopes that Saudi Arabia and Russia would agree to cut output amid the coronavirus pandemic-induced lockdowns around the world.
Brent crude oil futures jumped by 2.2% or 73 cents to USD33.78/barrel by 00.26 GMT after went down by 3% on the previous day. US WTI rose by 3.7% or 97 cents to USD27.05/barrel, after dropping b almost 8% on Monday.
On Monday, prices slumped as Saudi Arabia and Russia delayed the meeting addressing outputs to Thursday.
However, now market players are more positive that the world’s two main producers would agree to actually cut oil productions although the result would also rely on the US doing its part, according to some sources.
Even when the market is more optimistic nowadays, the risk of a major economic recession globally due to the lockdowns or social distancing measures to limit the spread of the virus still cloud the outlook.
Capital Economics noted that the coronavirus-related crash in demand are still dragging down prices even amid the prospect of the massive oil supply cut. The analysts estimated oil prices to remain around current levels until the economic activity globally shows recovery.
The latest polling by Reuters showed that the global economic recession is expected to be direr than what was estimated a few weeks ago due to the virus outbreak.
