Crude Oil prices were up on Wednesday morning after oil traders got excited that the last day of the West Texas Intermediate futures June contract closed without any problem on Tuesday.
Brent crude futures gained 0.14% to trade at $34.70 at the time this report was drafted, recovering some of its losses earlier in the oil trading session.
A group of crude oil-producing countries led by the Saudis has committed to increasing their production cut starting in June.
“The market sees both forces aligning: the cuts OPEC+ promised are materializing and other non-member production shut-downs are also really helping to limit the oversupply. Meanwhile, lockdown measures are removed globally, and the economy needs fuel to restart,” Paola Rodriguez Masiu, senior oil markets analyst at Rystad Energy, told CNBC.
(READ MORE:Here are 7 oil producing countries that have been most affected by COVID-19)
But with a global wrestle to reboot global economies closed by the COVID-19 virus, and some countries such as South Korea and China (second-largest economy in the world) fighting to hold the second wave of cases, many oil traders struck a more cautionary note.
Nations such as India and Brazil are also experiencing a surge in new cases of COVID-19 infections, with the number of cases around the world fast approaching about 5 million according to Johns Hopkins University data.
“A global recession, cautious consumers, and a later and potentially worse peak of the coronavirus outbreak in emerging markets such as Latin America, Africa, and South Asia”. Consultants the Eurasia Group told CNBC in an interview, envisaging caution on optimism for a quick demand recovery