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Oil rises more than 4% after OPEC + agreed to cut production, today, Monday, April 13, 2020 09:26 am
But curbing the gains raises concern about insufficient cuts to prevent oversupply as demand from the Corona virus declines.
After four days of controversy, OPEC, Russia and other producers in what is known as OPEC + agreed to cut production by 9.7 million barrels per day in May and June to support oil prices, which represents 10% of global supplies.
Brent crude futures rose $ 1.29, or 4.1%, to $ 32.77 a barrel by 05:19 GMT, after opening at a high level of the session at $ 33.99.
And West Texas Intermediate US crude increased 1.01 dollars, equivalent to 4.4%, to 23.77 dollars a barrel, after reaching the high level of 24.74 dollars.
“What this agreement is achieving is enabling the global oil industry, national economies and other industries that depend on it to avoid a very deep crisis,” said Daniel Yergen, deputy chairman of IHS Market.
He continued: “This restricts building stocks, which reduces pressure on prices when things return to normal at any time.”
The Kremlin said on Sunday that the leaders of the world’s three largest crude producers, Russian President Vladimir Putin, American Donald Trump and Saudi King King Salman, support the OPEC + agreement to cut production.
The Saudi Minister of Energy stated that Saudi Arabia, Kuwait and the UAE have volunteered more than agreed upon, bringing OPEC + reductions effectively to 12.5 million barrels per day from current production levels.