Oil prices clawed their way into positive territory on Tuesday as hopes that the world’s biggest producers will agree to cut output outweighed analyst fears that a global recession in the wake of the coronavirus crisis couldbe deeper than expected.
Brent crude was up 77 cents, or 2.33 percent, at $33.82 a barrel by 1353 GMT after falling more than 3 percent on Monday. West Texas Intermediate (WTI) crude was up 42 cents, or 1.61 percent, at $26.50, having dropped nearly 8 percent in the previous session.
“Oil prices are holding their ground with market expectations building on an agreement for an output reduction of 10 million barrels per day (bpd), or at least close to 10 million bpd,” BNP Paribas analyst Harry Tchilinguirian told the Reuters Global Oil Forum.
“With 28 million bpd of oversupply in the oil market in April and 21 million bpd in May, the global coordinated production cuts that are really needed may be too large for the producers to accept; perhaps twice as large as the numbers being discussed,” said Rystad Energy’s Bjornar Tonhaugen.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, a grouping known as OPEC+, had been curtailing production in recent years even as the United States ramped up its own output to become the world’s biggest crude producer.