Crude oil prices moved higher on Tuesday amid rising optimism that relaxation in lockdown restrictions in several countries across the world will help fuel energy demand.
Also, with the Organization of the Petroleum Exporting Countries (OPEC) and its allies committed to a significant reduction in crude outputs, concerns about demand-supply mismatch appear to be easing now.
West Texas Intermediate Crude oil futures for July ended up $1.10, or about 3.3%, at $34.35 a barrel.
Brent Crude futures closed up $0.64, or 1.8%, at $36.17 a barrel today.
In April, the OPEC member countries and their allies, termed as OPEC+, agreed to cut their combined output by nearly 10 million barrels per day in May and June to stabilise the oil market.
Russian energy minister Alexander Novak estimates that the current global crude surplus has fallen to 7mn-12mn barrels per day and that the global oil market will return to balance in June-July.
Supply has already dropped by 14 million to 15 million barrels per day owing to a coordinated production cut by the Opec+ alliance and output declines in other countries, according to Novak.
Moscow estimates the current global surplus at between 7 million and 12 million barrels per day.
The consistent decline in U.S. oil rigs count for the past several weeks too has raised hopes the supply level will come down soon.
The material has been provided by InstaForex Company – www.instaforex.com