Oil prices climb above $1 as OPEC+ settles on record output cut

Oil prices climbed above $1 per barrel on Monday after a four-day negotiation ended with major producers agreeing on a record output cut. However, gains were limited after investors feared that the move might not be enough to stave off oversupply as the pandemic severely curtailed global demand.

OPEC+, which consists of the Organization of the Petroleum Exporting Countries and its allies agreed on Sunday to cut their output by 9.7 million barrels per day (bpd), represents 10% of global supply.

Global supply cuts might total up to 20 million bpd which represents 20% of global supply, according to Kuwait’s oil minister.

Brent crude futures gained by 3.9% ($1.23) to $32.71 per barrel at 0058 GMT after it had opened at a high of $33.99.

WTI crude futures rose by 6.1% ($1.39) to $24.15 per barrel after reaching a high of $24.74.

However, oil price gains were limited amid demand concerns. Global fuel consumption had declined by nearly 30% as the COVID-19 pandemic left a majority of businesses and governments on lockdown.