Oil soars as suppliers respect production cuts, coronavirus blockages ease By Reuters

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© Reuters. FILE PHOTO: The sun is setting behind a pump cylinder outside Saint-Fiacre

By Sonali Paul

MELBOURNE (Reuters) – Oil prices rose Tuesday on clear signs that producers are living up to their commitments to reduce the supply of crude oil as more and more cars hit the road with blockages against relaxed coronaviruses in the world.

West Texas Intermediate (WTI) crude futures () were up 2.3%, or 75 cents, to $ 34.00 at 0057 GMT. There was no WTI settlement on Monday due to the US Memorial Day vacation.

Futures on crude Brent () rose 0.7%, or 23 cents, to $ 35.76, adding to a 1.1% gain in the holiday market on Monday.

The market was supported by comments from Russia indicating that its oil production had nearly dropped to its target of 8.5 million barrels per day (b / d) for May and June as part of its cut-off agreement. ‘supply with the Organization of the Petroleum Exporting Countries (OPEC) and other large producers, a group called OPEC +.

“There is certainly a feeling that these cuts have happened as well as you would expect,” said Daniel Hynes, senior commodity strategist for Australia and the New Zealand Banking Group.

OPEC + countries are expected to meet again in early June to discuss maintaining supply reductions to support prices, which have been down around 45% since the start of the year . Large producers agreed in April to cut production by almost 10 million barrels a day for May and June.

Russian Energy Minister quoted Minister Alexander Novak as saying on Monday that increased fuel demand should help reduce the current global surplus by around 7 to 12 million bpd by June or July.

“With the economy rebounding, the focus is certainly on improving fundamentals, rather than on what seemed like a complete collapse in demand just a few weeks ago,” said strategist Hynes.

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