Crude oil prices were up on Monday as the new OPEC agreement agreed on Sunday to lower oil production and balance the market against the demand slump and oversupply is supporting prices.
International benchmark Brent crude was trading at $32.38 per barrel at 0624 GMT for a 2.85% increase after it closed Thursday at $31.48 a barrel since markets were closed due to Good Friday.
American benchmark West Texas Intermediate (WTI) was at $23.55 a barrel at the same time for a 3.47% gain after it ended Thursday at $22.76 per barrel.
OPEC and its allies, which include 23 oil producing countries in the group known as OPEC+, agreed late Sunday to lower their total crude oil production by 9.7 million barrels per day (bpd) starting from May 1.
The output cut level is expected to reach as much as 20 million bpd when other oil producing nations outside the OPEC+ group, including the U.S., Mexico, Canada, Brazil and Norway, also lower their individual oil outputs next month.
One issue, however, is the fact that there will be an additional oil oversupply of 15-20 million bpd in the global oil market this month until the OPEC+ cuts take effect on May 1.
Oil prices have seen their historic low levels for a month as coronavirus continues to weaken global oil consumption while increasing the supply glut around the world.
OPEC+ countries, led by Saudi Arabia and Russia, failed on March 6 to either extend a production curb of 1.7 million bpd that was in place, or provide deeper output cuts.
Oil prices could remain low if the 23 members of OPEC+ and other oil producing countries fail to execute individual cuts next month or if they engage in a price war for higher market share.
By Ovunc Kutlu