Oil price4 Mar 2020 06:42
Oil prices jumped 1.5% on Wednesday on hopes that major producers have made progress towards sealing an agreement to implement deeper output cuts aimed at offsetting the slump in demand caused by the global coronavirus outbreak.
Brent crude rose by 78 cents, or 1.50%, to $52.64 a barrel at 0502 GMT, after settling down 4 cents in the previous session. U.S. West Texas Intermediate (WTI) futures rose by 72 cents, or 1.53%, to $47.90 a barrel, up for a third session.
A panel of the Organization of Petroleum Exporting Countries (OPEC) and its allies, a grouping known as OPEC+, recommended cutting oil output by an extra 1 million barrels per day (bpd) on Tuesday. The recommendation may mean that Russia and Saudi Arabia, the two biggest producers in the OPEC+ group, are close to a deal to support prices.
That would be in addition to 2.1 million bpd in current output cuts that include a 1.7 million bpd in curbs by OPEC+ and other voluntary reductions by Saudi Arabia, the world's biggest exporter. The group is set to meet formally in Vienna on March 5-6.
"This is no time for caution for OPEC+. Second-quarter oversupply needed some heavy lifting from the group to offset even before the COVID-19 (coronavirus disease) outbreak, but now it is a must," Barclays analysts said in a research note.