Oil prices climbed to $ 51.58 per barrel

Oil prices rose on Thursday before an OPEC meeting. At the meeting, Saudi Arabia leads the group. As a result, its allies, including Russia, were to agree with more production cuts to support the market.

Prices were also boosted by a smaller than expected increase in crude oil inventories in the United States. Which eased some concerns of excess supply in the world’s largest oil consumer.

Brent crude rose 46 cents, or 0.9%, to $ 51.58 per barrel at 0734 GMT. While the West Texas Intermediate (WTI) of the United States rose 37 cents, or 0.8%, at $ 47.15 per barrel.

Margaret Yang, a market analyst at CMC Markets, said that broad positive sentiment drove crude oil prices. And by much lower than expected crude oil inventory data.

The market is also anticipating a decent cut in production. That will be carried out by OPEC + since Covid-19 had a significant impact on global energy demand. A more massive reduction in production is needed to shore up oil prices.

US crude stocks increased modestly last week.  Less than analysts expected, while US oil exports rose to more than 4 million barrels per day (BPD) for the first time since December, which suggests an increase in demand abroad.

Concern about the growth of demand remains

OPEC, Ministers of the Organization of the Petroleum Exporting Countries, held their formal meeting later on Thursday. Another meeting of the larger OPEC + group that includes Russia will occur.

Saudi Arabia and other OPEC members are trying to gain Russian support to join them in additional cuts in oil production to shore up prices that have plummeted by one fifth this year. This is due to the worldwide spread of the outbreak of coronavirus.

Russia has instead proposed to keep the existing cuts by the group until the end of the second quarter, sources said.

Saudi Arabia wants additional cuts of 1 million to 1.5 million BPD for the second quarter. To maintain the existing cuts of 2.1 million BPD until the end of 2020.

Edward Moya, a principal market analyst at the OANDA runner, said that if OPEC + is content with something intermediate between the Russian request, then not to change the cuts. Moreover, the Saudi Arabia target of 1.5 million, might not be enough to keep prices sustained here. OPEC + needs to send a strong message, and anything below 1 million barrels in more massive production cuts will cause oil prices to decline sharply.

Geopolitical pressures in the Middle East also boosted prices. The Saudi-led coalition fighting in Yemen said it had thwarted an attack on an oil tanker off the coast of Yemen. The Saudi state news agency SPA reported this on Wednesday.

However, concern about the growth of demand remained, and the head of the International Monetary Fund said that the global spread of the virus had crushed hopes of obtaining more significant economic gains this year.