Oil advances amid output cuts possibility
Oil prices hiked on Tuesday amid optimism that the world’s top crude manufacturers will agree to reduce output production. The deal is necessary as the coronavirus contagion disrupts the world economy. However, analysts warned that the scheme may only do little in increasing oil demand.
Brent crude LCOc1 gained 73 cents, equivalent to 2.2%, and stood at $33.78 per barrel by 0026 GMT. The upbeat activity was monitored after the crude lost more than 3% on Monday. U.S. West Texas Intermediate CLc1 inched up by 97 cents, equivalent to 3.7%, and was quoted at $27.05 per barrel. It initially met an 8% decline in its previous trading activity.
The world’s leading oil manufacturers including Russia and Saudi Arabia are expected to sign a deal on Thursday. This deal will mandate oil producers to reduce outputs to a specific number but the agreement heavily relies on whether the United States will coordinate.
The possibility of a major recession is more daunting now that there is a worldwide economic shutdown and market inactivity due to the coronavirus contagion.