By Barani Krishnan
Investing.com - The ministers controlling the OPEC+ oil cartel pushed forth a two-day meeting scheduled from Tuesday to the end of May, leaving intact an earlier decision to ease production cuts despite the Covid catastrophe in India, the third-largest crude importer.
Crude prices rose, rebounding from Monday’s drop, as traders kept a close watch on the global pandemic situation, including in Japan, the fourth-largest oil buyer, which has declared a state of emergency amid preparations for the Tokyo Olympics that is to begin in 87 days.
“Oil clawing back some losses from the previous session. However, gains are likely to remain capped as the Covid crisis continues,” said Sophie Griffiths, who heads research for U.K. and EMEA at online broker OANDA.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, was up 43 cents, or 0.7%, at $62.34 by 11:10 AM ET, off the session high of $62.83.
London-traded Brent, the global benchmark for crude, gained 37 cents, or 0.6%, to $65.40. Brent’s session peak was $65.89.
The 23-member OPEC+ comprises the original 13 members of OPEC, or the Saudi-led Organization of the Petroleum Exporting Countries, and 10 other oil producing nations steered by Russia.
The group announced early this month its first meaningful production hike in a year, after withholding at least 7 million barrels per day in output since April 2020.
OPEC+ said it will pump an additional 350,000 barrels per day in May and June, and a further 400,000 barrels daily in July.
Oil prices fell to a historic minus $40 per barrel in April 2020 at the height of the demand destruction caused by the Covid-19. Production cuts since then by OPEC+ helped the market recover, with the rebound particularly accelerating after vaccine breakthroughs in November.
An OPEC+ joint technical committee that met on Monday envisioned the oil glut built up at the height of the pandemic almost gone by the end of the second quarter — despite the Covid situations in India and Japan.
The committee saw oil supplies declining by 1.2 million barrels a day and demand rising by 6 million barrels daily in 2021, the reports said.