Oil rose on Thursday, and oil-producing countries increased the recovery rate after they said they would speed up planned cuts to tackle the dramatic drop in demand due to the COVID-19 outbreak.
Crude oil prices have been one of the most turbulent weeks ever. West Texas Intermediate raw futures (WTI) CLc1 closed negatively at $ 37.63 on Monday with the worst sale in history. Global benchmark Brent crude LCOc1 reached its lowest level in the last 20 years on Tuesday.
Since the beginning of the year, both criteria have lost more than two thirds of their values. Fuel demand fell around 30% worldwide in April, and supply overflow continued over the months due to the pandemic.
Brent rose $1.19, or 5.8%, to $21.56 a barrel by 1:52 p.m. EDT (1752 GMT), while WTI jumped $3.01, or 22%, to $16.78.
The group, known as the Organization of Petroleum Exporting Countries (OPEC) and OPEC +, has agreed to record a record reduction of around 10% of global supply to support oil prices, including Russia, but prices have continued to drop.
Kuwait said on Thursday that the deal began cutting oil supply to the international market before May 1, when it will come into force.
Sources say that Russia is looking for options to cut its production and may go as far as burning its own oil. Russia’s production has not changed much since March.
In fact, it is unclear whether all this will be enough to improve the compensation of the weak demand.
In addition to above, oil has moved upwards, in accordance with the words that USA Navy has been instructed to fire on any Iranian ships that harass it in the Gulf. Against that, it was said that in case the security of Tehran is threatened in the Gulf, the US warships will be destroyed.
This is a temporary situation that once again increases the tension between the USA and Iran. Unless the tension pushed up, it is difficult to have a permanent support with the market.