Oil prices surged on Wednesday after OPEC and its allies stuck to their plan to cautiously bring back oil supply to the markets in June and July while expecting a strong recovery in demand in the United States and China, the world’s two biggest oil consumers.
U.S. West Texas Intermediate (WTI) crude futures increased 18 cents, or 0.27 percent, to $67.90 as of 0642 GMT, extending a 2.1 percent gain following the Memorial Day holiday in the United States on Monday. Prices rose to their highest since October 2018.
Brent crude futures climbed 22 cents, or 0.31 percent, to $70.47 a barrel, after rising 1.3 percnet overnight, when it hit its highest since March 8.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, agreed on Tuesday to keep to their plan to gradually ease supply curbs through July.
“The market appears focused on the more constructive outlook for later this year, with OPEC+ of the view that the market will see significant stock drawdowns between September and the end of the year,” ING Economics analysts said in a note.
Including extra cuts by Saudi Arabia tapering off through July, the producer group will be returning 700,000 barrels per day (bpd) in June and 840,000 bpd in July, ING said.