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Oil prices propped up by IEA demand forecast, output cuts

by ChemOrbis Editorial Team -
  • 16/06/2020 (17:18)
Crude oil prices rose by more than 3% during an intraday trading on Tuesday, buoyed by production cuts and EIA’s forecast on oil demand. Oil markets have been volatile since late last week amid the remerged virus cases in Asia.

OPEC and its allies decided to extend production cut deal through July and called out countries that failed to comply with the deal to make up their commitments with extra cuts later. Iraq has already made up for its non-compliance and made some deep cuts to its exports into Asia in response to the OPEC’s request.

Another supporting factor for crude oil prices was a monthly report published by the International Energy Agency (IEA) early today. Accordingly, the Paris-based agency forecast oil demand at 91.7 million barrels/day for 2020, up by 500,000 b/d from its estimate in May.

The agency also reported that energy markets are closing the first half of 2020 on a relatively positive note looking at the latest recovery in oil prices.

Following these positive developments, West Texas Intermediate crude for July delivery were trading 4% higher or $1.49 at $38.61/barrel on the New York Mercantile Exchange during an intraday trading on Tuesday. Brent oil benchmark for August delivery was also higher by nearly 4% or $1.45 to trade at $41.17/barrel at the time of publication.
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