US oil prices rose five percent, while Brent crude exceeded $ 26 a barrel on Friday, and both benchmarks recorded their first weekly increase in four weeks.
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OPEC and its allies began record production cuts to counter the oversupply of the Corona virus.
In April, US crude fell to its lowest level ever, while Brent reached its lowest level in 21 years, as demand plunged by the pandemic, and OPEC and other producers raised production before a new supply agreement came into effect on Friday.
Brent futures for July fell four cents, or 0.2 percent, to be settled at $ 26.44 a barrel, and the June contract expired on Thursday at $ 25.27.
US West Texas Intermediate crude ended the session, up 94 cents, or five percent, to $ 19.78 a barrel after climbing to $ 20 earlier in the session.
After three consecutive weeks of losses, Brent increased 23 percent, while West Texas Intermediate added about 17 percent.
The Organization of the Petroleum Exporting Countries, Russia and other producers, in what is known as the OPEC + group, started to cut production by 9.7 million barrels per day as of May 1.
A number of countries and regions, including central China’s Hubei Province, in which the emerging pandemic coronavirus first appeared, are beginning to ease the general isolation measures that have been imposed to contain the virus.
But there are doubts that the cut, which is the largest ever agreed, will be enough, as demand is unlikely to recover quickly.
A Reuters survey showed on Thursday that before the new production cut, OPEC had raised output sharply to the highest level since March 2019, boosting the market’s surplus.
In highlighting the difficulties faced by some producers to meet their obligations, sources in the sector said that Iraq will face difficulties to meet its share of production cuts by about a quarter. Iraq is the second largest producer in OPEC.
Prices also received support from US Energy Information Administration data that showed crude stocks increased nine million barrels last week to 527.6 million barrels, below analysts’ expectations for an increase of 10.6 million barrels.