Brent crude LCOc1 was up US$0.51, or 1.2%, at US$42.81/bbl, by 06:28 GMT, while WTI crude CLc1 rose US$0.32 cents, or 0.8%, to US$39.87/bbl.
Both hit their highest since 6 March earlier in the session, at US$43.41 and US$40.44, respectively.
Brent has nearly doubled since OPEC+ agreed in April to cut supply by 9.7 million bpd during May-June to prop up prices that collapsed due to the coronavirus crisis.
On Saturday, OPEC+ agreed to extend the deal to withdraw almost 10% of global supplies from the market by a third month to the end of July. Following the extension, Saudi Arabia hiked its monthly crude prices for July.
Low prices have drawn Chinese buyers to boost imports. Purchases by the world’s largest crude importer rose to an all-time high of 11.3 million bpd in May.
Market participants are now eyeing compliance among OPEC members such as Iraq and Nigeria, which exceeded production quotas in May and June, for trading cues, analysts said.
Libya’s supply could also rise soon as two major oilfields have reopened after months of a blockade that shut off most of the country’s production.
Even as oil prices recovered, they are still well below the costs of most US shale producers, leading to shutdowns, layoffs and cost-cutting in the world’s largest producer.
The number of operating US oil and natural gas rigs fell to a record low for a fifth week in a row in the week to 5 June, according to data from Baker Hughes.
Nearly 30% of US offshore oil output was also shut on Friday as tropical storm Cristobal entered the Gulf of Mexico. The storm weakened to a tropical depression on Monday morning.
Read the article online at: https://www.oilfieldtechnology.com/special-reports/08062020/oil-prices-rise-following-opec-deal-extension/