Oil futures rose on Tuesday, and were backed by Saudi Arabia’s commitment to deepen production cuts in June to help exhaust the abundance in the global market, driven by the demand for fuel from the coronavirus pandemic.
Brent crude LCOc1 futures advanced 0.5%, or 15 cents, to $29.78 at 0500 GMT, after hitting an intraday high of $30.11 a barrel.
West Texas Intermediate (WTI) crude CLc1 futures were up 1%, or 26 cents, at $24.40 after touching an intraday high of $24.77.
Saudi Arabia said it would reduce overnight production by about 1 million barrels (bpd) per day in June and reduce its total production by about 40% compared to April to 7.5 million bpd.
The United Arab Emirates and Kuwait committed to reduce production by a total of 180,000 bpd.
Kazakhstan also ordered producers in large and medium oil fields, including Tengiz and Kashagan, to reduce oil production by approximately 22% in the May-June period.
Although evident benefits have been made, projects and actions to further deepen cuts are being questioned by some.
Production cuts, are expected to ease the pressure on the world’s largest economies which are in gradual recovery with fuel demand and crude oil storage capacity by relaxing the coronavirus restrictions.
On the other hand, it is highly significant to be ready to a second wave of COVID-19 cases that can cause repeating deadlocks of the coronavirus, including China and South Korea.
Data showing that China’s April factory prices fell sharply in four years, increased investor concerns as it emphasized weak industry demand.
Analysts say this week’s inventory data will be the key of the raise in oil prices.