Oil prices grew on the third day of the business week, after world economies witnessed recoveries from the COVID-19 impact.
Media reports said that; Brent, the global benchmark, reached $44 a barrel at one stage in European trading.
This is the highest level of oil prices since early March — as more countries lifted lockdown restrictions amid pandemic.
Stock markets also took heart from hopes of an end to trade battle between China and the US, when President Donald Trump said a deal was “fully intact.”
The traders of oil, for now, digested a new report from released by the experts at consultancy Energy Aspects showing that the reduction in demand because of the Covid-19 was significantly lower than previously estimated.
According to oil experts, “It turns out that global oil demand fell by less than 20 percent, around 18.5 million barrels per day at the height of the COVID-19 lockdowns in April, when most of the northern hemisphere — home to 90 percent of global manufacturing — was shut down.”
The historic cuts in yield agreed in April by the OPEC+ alliance led by Saudi Arabia and Russia “were more severe than required,” experts said.
More supply has since been taken out through voluntary cuts by Saudi Arabia and others, and a strict compliance regime.
Some OPEC+ members want the current reduction level of 9.6 million barrels per day to be lengthened for a further month, but Russian officials see no need for the cuts to be extended.
Rising demand would be ammunition for Russia and others who want to add supply when the current cuts deal expires at the end of this month.
Experts are of the view that Saudi Arabia is in a very weak position both economically and militarily and has become increasingly reliant on Russia due to the OPEC+ deal.