Global oil output slashed by 10%

OPEC, Russia and other oil-producing countries agreed on April 12 to reduce production by a record volume, about 10% of global supply, Reuters reports.

Oil-producing countries agreed to reduce the output by 9.7 mln bpd during May-June after a compromise reached with Mexico. These measures were taken to support oil prices during the coronavirus Covid-19 pandemic.

After the video conference, Azerbaijan's Energy Ministry said that Mexico will reduce production by 100 thou. bpd from May and the U.S. will take over the reduction of another 300 thou. bpd instead of Mexico.

International benchmark Brent futures LCOc1 rose 5.5% to USD 33.22 per barrel.

"Still, they are down more than 50% from their January peak as the novel coronavirus pandemic has brought the global economy to a standstill and hit fuel demand," the report reads.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 7.3% at USD 24.43 per barrel in highly volatile trade, having fallen more than 3% to $22.03 earlier in the session.

“While the Federal Reserve’s stimulus has allayed fears of a financial crisis for now, the economy is far from returning to normalcy,” said Hiroshi Watanabe, economist at Sony Financial Holdings.

Previously reported that wheat prices marked a significant progression in Chicago on Mar. 6 due to strong international demand and logistic disruptions related to transport restrictions imposed by the coronavirus epidemic.