Crude Oil Prices Surge To Near 3-Month High On Output Cut Expectations

Oil prices in the international market rose to almost $40/barrel, a near three-month high, on optimism that production cuts will stay extended till the world demand recovers amid the COVID-19 pandemic.

The global benchmark for crude oil price, Brent crude, rose 0.6 percent on Wednesday to $39.79 a barrel, the highest since 6 March. It gained 3.3 percent on the previous day.

US West Texas Intermediate crude (WTI) gained 33 cents, or 0.9 percent to $37.14, also the highest since 6 March and gained 3.9 percent in the previous session.

Oil prices have been gaining on continuing recovery seen in China and slow opening of other economies after their lockdown to contain the spread of the virus. In April, the benchmarks had seen a sharp correction, in fact, the US WTI crude had hit zero.

According to a Reuters report citing sources, the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia may extend production cuts of 9.7 million barrels per day (BPD), or about 10 percent of global output, into July or August. Their meeting is scheduled to be held on Thursday, online.