Oil prices rose more than 1%, after estimates that shale oil production in the world’s largest crude producer will fall record in April, in addition to cuts from other major producers. US production is falling due to falling prices, and is expected to be the record low in April. Other countries increase the estimated cut in production to about 19.5 million bpd.
Brent LCOc1 futures rose 53 cents, or 1.7%, to $32.27 a barrel by 0420 GMT after settling 0.8% higher on Monday. West Texas Intermediate (WTI) crude CLc1 was up 32 cents, or 1.4%, at $22.73, having dropped 1.5% the previous session.
The Organization of the Petroleum Exporting Countries, along with Russia and other producing countries known as OPEC +, agreed to reduce production by 9.7 million barrels (bpd) in May and June after Easter.
Analysts, oil industry executives and others, however, say the measures taken will not be sufficient for an improvement to offset the shrinkage of nearly a third of global oil demand due to this epidemic, regardless of the numbers.Demand destruction at present is beyond anything any coordinated segment would do.
Oil prices are still showing up a drop over 50% this year.
With some countries in the G20 agreeing to purchase oil for their national reserves, current stock capacities are expected to be loaded quickly. Russia does not have a lot of storage capacity, and capacity in Europe is almost full.
Meanwhile, signs that the coronavirus outbreak may peak in some parts of the world continue to harass the market as a serious threat to be highly considered. However, oil demand in China, which is thought to be largely under control, gives hope with data showing that crude oil imports increased 12 percent in March compared to the previous year.