Brent futures rose 53 cents, or 1.7%, to $ 32.27 per barrel at 4:20 a.m. GMT after settling 0.8% higher on Monday. US West Texas Intermediate (WTI) crude rose 32 cents, or 1.4%, to $ 22.73, after falling 1.5% the previous session.
The Organization of the Petroleum Exporting Countries, as well as Russia and other producing countries – known as OPEC + – agreed at Easter to cut production by 9.7 million barrels per day (b / d ) in May and June, about 10% of the world supply before the viral epidemic.
The United States, the world’s largest producer, is also reducing production, and other countries are bringing the estimated production reduction to around 19.5 million bpd.
But analysts, oil industry leaders and others say that no matter how massed the numbers, the reduction will not be enough to match a contraction of about one-third of global demand for oil. because of the epidemic.
Oil prices are still down more than 50% so far this year.
“We are in this moment where the destruction of demand goes far beyond anything they will do in any coordinated cut,” said Greg Priddy, director of global energy and Middle East at Stratfor at Houston.
Stocks, when available, are expected to fill quickly even though some G20 countries have agreed to buy oil for their national reserves.
“Russia does not have much storage capacity and the capacity in Europe will be full,” said Priddy.
However, US production is declining along with falling prices, and there are signs that the coronavirus epidemic may have peaked in some parts of the world.
There are already signs in China, where the virus started and is now largely under control, that demand has returned with data showing that crude oil imports increased by 12% in March compared with the previous year .
Still, U.S. shale oil production is expected to experience the largest monthly decline ever in April, the U.S. Energy Information Administration (EIA) said on Monday.
Production has been declining for several months, but the declines are expected to accelerate sharply in April with a loss of nearly 200,000 b / d of production, according to the EIA.
This would bring the production of shale oil, which was the engine of strong growth in American production, to 8.7 million b / d.
Many US producers, including majors like Exxon Mobil and Chevron, have said they will cut spending and expect to produce less crude in the coming months.