Oil prices are rising due to optimism regarding the latest commitments of major oil producers to cut production. However, there is concern that the re-increase in coronavirus cases may harm fuel demand.
Brent crude rose 38 cents, or 0.9%, to settle at $41.18 a barrel. West Texas Intermediate crude (WTI) rose 75 cents, or 2%, to end at $38.94 a barrel.
The Organization of the Petroleum Exporting Countries, Russia and other producers, known as OPEC +, agreed on Saturday to extend the record cut of 9.7 million barrels (bpd) per day by the end of July.
However, Saudi Arabia, Kuwait and the United Arab Emirates have announced that they will not sustain additional supply cuts of more than one million barrels per day.
Libya, which supports the market announced on Tuesday, that there has been a halt due to a blockade sourced by an armed group for a short while a few days after production started and then a force majeure declare for some exports from Sharara oilfield.
Fuel demand recovered after the crash in April that brought deadlocks in order to control the pandemic. Analysts, however, say it is an overly optimistic expectation that the oil market will increase at a rate of more than $ 40 a barrel.
The coronavirus killed more than 400,000 people worldwide, and the number of new daily cases broke a record Sunday, as the pandemic has not yet peaked in central America.
Some analysts have raised their 2020 estimates for Brent to $ 40.40 per barrel and WTI to $ 36, but warned that prices may retreat in the coming weeks due to demand uncertainty and stock supply.
US crude oil inventory is growing as pandemic limits the demand. As it was stated on Tuesday, crude oil stocks rose by 8.4 million barrels last week to 539.4 million barrels. Analysts were expecting to withdraw 1.7 million barrels. Official government data will be released today.
