The price of oil has registered a new increase on Tuesday. The price of crude oil recorded its highest level since the beginning of March, just before the pandemic spread massively in Europe.
A barrel of Brent, the benchmark for Europe, stood at around $44.6 per barrel on Tuesday, which is equivalent to 3.19% more on the previous day. The intraday high was $44.89, while the low was around 43 ‘greenbacks.’
On the other hand, the price of a barrel of the West Texas Intermediate (WTI), reference for the United States, has observed a rate of $42.1. It has rebounded 3.1% compared to the previous day. United States crude oil has not recorded such a high price since March 5. For the first time in April, because of the perfect storm of weak demand, WTI crude oil prices turned negative. The exhaustion of storage capacity drove oil prices to close at -$37 a barrel.
All these came in the wake of the Organization of the Petroleum Exporting Countries (OPEC) and its allied nations deal. OPEC producers, even competitors like the United States, Canada, and Mexico, came together to cut global crude oil production. However, the reduced amount totaled only a third of global daily oversupply. It encouraged Saudi Arabia to pump as fast as possible before the agreement would take effect.
Last week, OPEC and its allied nations were confident that the increase in supply would not affect the oil market due to increased domestic demand.
From August to the end of the year, the organization will add two million barrels of crude oil daily to world production, as the second phase of its pumping control will be adopted. It foresees a cut of 7.7 million barrels per day, compared to the 9.7 million they have been cutting since May.