Oil prices rose on Tuesday, as producers complied with supply reduction commitments and fuel demand increased as coronavirus restrictions eased.
Brent crude LCOc1 futures gained 64 cents, or 1.8%, to settle at $36.17 a barrel. West Texas Intermediate (WTI) crude futures CLc1 rose $1.10, or 3.3%, to settle at $34.35 a barrel.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC +, including Russia, agreed to cut their total output by about 10 million barrels a day in May-June to support prices last month.
According to sources, Russian Energy Minister would meet with oil producers on Tuesday to discuss the possible cuts since June. However, some other countries, including the major Gulf producers Saudi Arabia, the United Arab Emirates and Kuwait, have already pledged to go beyond their commitments.
Russian oil production volume is also said to be close to the country’s 8.5 million bpd target in May and June.
In this regard, all the talks about demand and establishing the balance between price seems supportive.
According to calculations, the increase in fuel demand is said to be expected to help cut global supply of about 7 million to 12 million bpd in June or July.
OPEC + countries will meet again in early June to discuss continued supply cuts.