By Adedapo Adesanya
As the oil markets await the March 5-6, OPEC meeting date that could result in additional cuts and possibly lift prices of the commodity, traders witnessed surge in the prices on Tuesday.
The Brent crude futures, the international benchmark, gained 11 cents or 0.22 percent to trade at $52.05 per barrel, while the US West Texas Intermediate (WTI) crude registered a gain of 29 cents equivalent to 0.75 percent to sell at $47.04 per barrel.
Oil prices had been facing pressure from the COVID-19 spread across Asia, the Middle East, Europe, the Americas, and Africa, causing panic, which has reduced demand due to restricted travel, slowdown of sales, and fears of a global recession.
However, this new week opened with optimism as oil prices rose by over five percent on Monday, and despite a low movement, it still continued selling in the positives, marked by expectations for a further cut to oil production by the Organization of the Petroleum Exporting Countries and its allies.
As days to the meeting, which will kick start on Thursday in Vienna, the headquarters of the cartel draws nearer, the Joint Ministerial Monitoring Committee, which monitors compliance with the production-cut agreement, is set to meet on Wednesday (March 4).
It was observed that support came for the market from Russia’s President, Mr Vladimir Putin, who hinted that Russia may once again join OPEC in its efforts to stimulate oil prices even though Russia itself has no problem with current price levels.
“I want to stress that for the Russian budget, for our economy, the current oil prices level is acceptable,”
“Our accumulated reserves, including the National Wealth Fund, are enough for ensuring a stable situation, the fulfilment of all budget and social liabilities, even under a possible deterioration of the global economic situation,” he said.
Russia has been budgeting for lower prices for years now, after it suffered the fallout of the 2014 oil price collapse.
President Putin, however, noted there was no guarantee that deeper production cuts would improve demand for oil but market analysts believe that this would at least reduce supply, which will bring about more demand at a higher price which has been volatile since the coronavirus spread began in January.
Globally, more than 92,000 people in nearly 60 countries have been infected while 3,131 have died, while 48,190 individuals have recovered from COVID-19.
Dipo Olowookere