In combination to stronger financial markets, expectations that the OPEC cartel will continue to withhold oil supply has caused a surge in oil prices this Tuesday, with Front-Month crude futures being at $62.71 at 0630 GMT — a 0.7% increase since Monday’s close.
Despite the recent fall in prices in the last session, traders attribute this increase in oil prices to a broader strengthening of financial markets following China’s decision to abate financial rules.
Additionally, traders argue that Russia’s recent statement that it might support extended supply cuts in conjunction to with other OPEC+ member countries has also caused the surge in prices. This extension of supply cuts would be a continuation of OPEC+’s decision earlier in the year to withhold supplies in order to bolster prices. Nonetheless, despite the recent vitalization of the financial markets on Tuesday, analysts still consider the possibility of a global economic downturn to be highly plausible.