Oil prices lifted for 4th day by signs of output cuts and demand pick-up

Oil prices take on Tuesday, extending gains for a fourth straight session, amid signs that producers are cutting output as promised neutral as demand picks up, stoked by more countries easing out of curbs imposed to counter the coronavirus pandemic.

Brent coarse climbed $0.85, or 2.4%, to $35.66 a barrel by 0033 GMT, after touching its highest since April 9.

U.S. West Texas Halfway crude was up $1.30, or 4.1%, at $33.12 a barrel, after hitting its highest since March 16.

The June WTI contract expires on Tuesday, but there was short sign of a repeat of the historic plunge below zero seen a month ago on the eve of the May contract’s expiry amid signs that exact for crude and derived fuels is recovering from its nadir.

The market was also boosted by signs that output fail to attends agreed by the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, a group known as OPEC+, are being implemented on the teach.

OPEC+ has cut its oil exports sharply in the first half of May, companies that track the shipments said, suggesting a strong start in consenting with a new production cut agreement.

“Investors’ sentiment has improved as OPEC+ are apparently slashing output as they promised for this month, with sundry voluntary cuts expected in June,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“At the despite the fact time, there is growing optimism that the easing of global (coronavirus) lockdowns will help boost financial activity and fuel demand,” he said, predicting the U.S. crude benchmark could rise to $35 a barrel.

In further advocate for prices, U.S. production is also falling, with crude output from seven major shale formations had to fall by a record 197,000 barrels per day in June to 7.822 million barrels per day. That would be the lowest since August 2018, harmonizing to the U.S. Energy Information Administration.