Oil prices increased on Tuesday over positive global economic prospects and oil demand recovery, although gains were tempered by surging coronavirus cases in India, the world’s third-biggest crude importer.
International benchmark Brent crude was trading at $65.47 per barrel at 0721 GMT for a 0.67% rise after closing Monday at $65.03 per barrel.
American benchmark West Texas Intermediate (WTI) was at $62.33 per barrel at the same time for a 0.67% increase after ending the previous session at $61.91 per barrel.
Prices found support after OPEC Secretary-General Mohammad Barkindo signaled a global economic and oil market recovery.
However, in his speech during Monday’s Joint Technical Committee (JTC), Barkindo also emphasized there were factors that require ongoing monitoring and vigilance.
“The revival of fortunes for the health of the economy and our industry is due, in no small part, to the efforts of the Declaration of Cooperation participating countries,” he said.
Major oil-producing countries of OPEC+ are scheduled to meet at the Joint Ministerial Monitoring Committee (JMMC) and 16th Ministerial Meeting of OPEC+ on Wednesday.
The group is currently cutting its production by 7.9 million barrels per day (bpd) and last month decided to incrementally ease output by 2.1 million bpd by the end of July.
According to the previous deal, the group could raise production by up to 500,000 barrels in May. Saudi Arabia's Energy Minister Abdulaziz bin Salman had said during the last OPEC+ meeting that the group “can tweak or adjust 500,000 barrels either way in line with market conditions.”
Rystad Energy’s Head of Oil Markets Bjornar Tonhaugen attributed the upward price movement to expectations that OPEC+ will address the developments in India where increasing cases continue to ravage the country and weigh on prices while limiting gains.
“Since the country is among its major clients [of OPEC+], it may reconsider its output policy,” he said.
“Traders do not want to miss out on a potential bullish OPEC+ meeting so a limited optimism is reflected in prices. Should OPEC+ turn a blind eye to India though, the gains may quickly evaporate,” he added.
The armed forces in India promised immediate medical assistance to combat the pandemic where the latest COVID-19 cases topped 300,000 for the sixth consecutive day.
India has reported 323,144 new cases in the last 24 hours, down from Monday's global high of 352,991, with overcrowded hospitals continuing to turn away patients due to a lack of beds and oxygen supplies.
The country’s authorities registered 2,771 new deaths, but experts believe the number is much higher.
By Sibel Morrow