Oil prices increased during the week ending April 2 mostly supported by the cautious approach of the world’s major oil producers in their decision to gradually increase output up to July in support of the market that is battling with a pandemic-induced supply glut.
International benchmark Brent crude traded at $64.67 at 1100 GMT on Friday, posting a 2.29% increase from Monday when trade at 0700 GMT registered at $63.22 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $61.30 at the same time on Friday, dropping 2.81% relative to $59.62 a barrel on Monday.
Oil markets started the week with news that a 400-meter-long container ship, the Ever Given, which ran aground across a single-lane stretch of the Suez Canal earlier last week, was successfully refloated on Monday.
The vessel halted transit in both directions on one of the world's largest seaborne trade chokepoints for six days, causing supply disruptions in oil products.
Supply disruptions normally reflect negatively on oil prices but considering that it was only a few days of slowdown, it did not have a crucial impact on the market, which is already struggling with a supply glut due to pandemic-induced weak demand.
The uncertainty ahead of a key two-day meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, also put pressure on prices.
While the market expectation was a rollover of the existing production level for at least two months in line with current low oil demand, the group on Thursday agreed to incrementally increase production.
The 23-members of the OPEC+ group approved the increase of production of 350,000 barrels per day (bpd) in May and June and 400,000 bpd in July.
The group will cancel the production exception on both Russia and Kazakhstan that was in place and will gradually phase out Saudi Arabia's additional production cut of 1 million bpd.
With the new output quota, the group's collective production will reach 5.8 billion bpd in July.
Contributing to the upward trend in oil prices, US crude oil inventories defied expectations and declined last week, signaling a crude demand rebound in the US, the world's largest oil consumer.
US commercial crude oil inventories fell by 900,000 barrels, or 0.2%, to 501.8 million barrels, relative to the market expectation of a build of 400,000 barrels, according to data released by the country's Energy Information Administration (EIA) on Wednesday.
By Sibel Morrow