Crude Oil futures rallied with U.S. and global benchmark prices marking their highest settlements in more than two years after the Organization of the Petroleum Exporting Countries and their allies kept their current plan to gradually increase the production through July in place.
Ann-Louise Hittle, vice president of Macro Oil, at Wood Mackenzie said that sticking to increases planned at the April meeting is what the market needs. Demand growth is outpacing supply gains even with the agreed month-by-month OPEC production increases taken into account.The Oil-producer group known as OPEC reaffirmed the prevailing commitment to slowly return 2 million barrels a day of the adjustments to the market. West Texas Intermediate crude for July delivery CLN21 CL.1 climbed $1.40, or 2.1%, to settle at $67.72 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw their highest settlement since Oct. 22, 2018.
Oil investors are optimistic that demand is improving as economies recover from the coronavirus pandemic and a dwindling supply glut may mean the market can absorb additional supply. The analyst said the end of COVID-19 lockdown measures and increased economic activity, plus improved prospects for global travel, should boost global Oil demand.