Crude oil prices increased after OPEC and its allies agreed to extend oil supply cuts into April as they expect a stronger demand recovery amid the Covid-19 pandemic.

Brent crude climbed by $0.10, or 0.2%, to reach $66.84 a barrel while the US West Texas Intermediate (WTI) crude futures rose by $0.17, or 0.3%, to reach $64.00, reported Reuters.

The increase in two contracts by more than 4% follows the decision by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, not increase oil output, except to Russia and Kazakhstan.

CMC Markets chief market strategist Michael McCarthy said: “It just goes to show how much of a surprise the OPEC+ discipline is.

“What makes the gain even more impressive is that it comes against a risk-off backdrop and a higher US dollar.”

Saudi Arabia previously voluntarily agreed to maintain a cut of one million barrels per day until April, despite the recovery of the oil prices over the past two months.

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Commonwealth Bank commodities analyst Vivek Dhar was cited by the news agency as saying: “The group’s supply discipline shows that Saudi Arabia’s preference for caution is being adhered.”

Analysts are making price forecast review pertaining to the OPEC+ oil supply cuts, as well as US shale producers who seek to improve returns to investors by curbing spending.

OANDA analyst Edward Moya was reported by Reuters as saying: “Oil prices could rip higher now that a tight market is likely up through the summer. WTI crude at $75 no longer seems outlandish and Brent could easily top $80 by the summer.”