Fundamental Comment

Oil set for weekly gain as OPEC+ deal takes effect

Oil set for weekly gains as OPEC+ deal takes effect

Oil prices rose earlier today, set for a weekly gain, supported by the start of an OPEC+ agreement to cut supplies and a lower-than-expected increase in U.S. crude inventories.

As of 11:30 GMT, West Texas Intermediate (WTI) crude futures traded at $18.53 a barrel, after hitting a high at $20.31 earlier in the session, on track for its first weekly gain in four weeks.

Brent crude also registered a high at $26.01 a barrel, while the highest level recorded during the session was at $27.76.

The black gold benefited from the Organization of Petroleum Exporting Countries (OPEC) and allied crude producers on a historic cut in supplies of about 9.7 million barrels per day, which came into effect from today for two months.

The agreement aims to make up for part of the sharp collapse in global oil demand, which came against the backdrop of the repercussions of the fight against the Covid-19 pandemic, including travel and movement restrictions, as well as orders to stay at home.

Moreover, US oil inventories rose by 9 million barrels in the week ended April 24, but this increase was below expectations of 11.2 million barrels.

US President Donald Trump has said that his administration will soon unveil a plan to help the country's oil companies.

Crude oil soared over the past few days, rising yesterday by about 25 percent, but US crude still lost about 8 percent in April.

Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, descended 0.08 percent at 98.96, heading for a weekly loss.

The outbreak of Coivd-19 has claimed more than 234,270 lives and infected more than 3,319,420 people worldwide, according to calculations by Johns Hopkins University.

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