A day after the National Assembly passed the revised 2020 budget pegging crude oil benchmark at $28/barrel, crude oil price on the international market rose above $40.
Prices marched higher on Wednesday, with Brent crude futures rising above $40 a barrel on expectations some of the world’s most powerful oil producers will reach a deal to extend supply cuts.
A sustained rise in the price of the commodity will mean that the predicted over three per cent negative growth for the economy in 2020 is greatly moderated.
OPEC and non-OPEC allies, a group of oil producers sometimes referred to as OPEC+, are expected to hold their next meeting on Thursday.
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It comes after OPEC member Algeria, which currently holds the rotating presidency of the group, proposed that the meeting should be brought forward from the original date of June 9-10.
In April, OPEC+ agreed to cut oil production by a record 9.7 million barrels per day (b/d), approximately 10% of global output. The move was designed to prop up prices as the coronavirus pandemic led to an unprecedented collapse in oil demand.
The production cuts began on May 1 and are set to run through to the end of June. Under the current deal, the cuts will then be tapered back to 7.7 million b/d from July through to the end of 2020, and 5.8 million b/d from January 2021 through to April 2022.
Brent crude futures traded at $40.33 a barrel on Wednesday, hitting its highest level since March 6 and up around 1.9% for the session. The international benchmark jumped over 3% on Tuesday.
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