Futures for American oil benchmark jumped more than nine percent on Tuesday, extending their earlier gains. West Texas Intermediate (WTI) for June delivery was trading at over $22 a barrel as of 07:30 GMT, more than doubling from last week’s intraday lows.
Meanwhile, international benchmark Brent for July delivery gained more than six percent to $29.02 after climbing in the previous session.
Both WTI and Brent have been advancing for several consecutive days, with the US crude starting its winning streak on April 29 and the latter just one day earlier.
The positive sentiment in the energy market comes as the members of the Organization of the Petroleum Exporting Countries (OPEC) as well as allied oil producers started cutting oil output as a key oil agreement came into force on May 1. The accord is set to wipe out nearly 10 million barrels per day from the overflowed market, while some countries beyond the agreement have also curbed production to help oil prices rebound.
At the same time, some countries in Europe and Asia, as well as some US states, are slowly lifting some of the coronavirus-related restrictions, giving hope that the demand-supply gap may become smaller. However, some gloomy forecasts indicate that the coronavirus crisis crushed global demand for the commodity as much as much as 30 percent last month. With no cuts in force, some countries even boosted their exports of crude in April, worsening the supply glut and fueling fears that the world is running out of space to store oil.
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