Oil prices rose 3% in fluctuating trade on Tuesday, as Wall Street revived and the oil demand forecast for 2020 increased, but gains are limited by a second coronavirus wave concern.
Brent crude futures LCOc1 ended the session up $1.24, or 3.1%, at $40.96 a barrel while West Texas Intermediate crude (WTI) CLc1 rose $1.26, or 3.4% to settle at $38.38 a barrel.
Along with the expectations of analysts of pulling 152,000 barrels out of the market, oil has made some gains in trade after US crude oil stocks rose 3.9 million barrels last week. Official data will be released on Wednesday.
Wall Street opened higher after a record increase in May , the market further increased, and the prospects for rapid economic recovery after the pandemic were revived. At the same time, data showing that COVID-19 mortality rates decreased in a general steroid drug trial contributed to this.
The IEA monthly report estimates 91.7 million barrels (bpd) per day in 2020, showing higher than expected consumption during coronavirus crashes. 500,000 bpd higher than the forecast in May report. On the other hand, the agency said that the sharp decline due to the virus epidemic meant that the world would not return to pre-pandemic demand levels before 2022.
Coronavirus cases increased more than 8 million worldwide this week. At the same time, while infections were over-emerging in Latin Americ and earnings were limited while dealing with regenerated epidemic in the US and China.
China has rapidly increased restrictions on people leaving Beijing to stop the most serious coronavirus exacerbation since February.
Unless the American people are sure that the outbreak is under control, a full economic recovery is not expected in the USA.
Stating that oil supply dropped approximately 12 million bpd in May, the group known as IEA, Organization of Petroleum Exporting Countries and OPEC + said that its allies, including Russia, decreased its production by 9.4 million bpd.
This means OPEC + was 89% compatible with the cuts agreed in May.
OPEC + agreed to extend production cuts of 9.7 million bpd by the end of July. He also called on members who did not adapt and did not commit with extra deductions. Iraq, which was displaying the worst cooperation among the major producers, cut its crude oil supply to Asia to a large extent in July.