Global oil prices jumped after Saudi Aramco noted that the energy market is witnessing a partial recovery amid growing Asian demand.
Brent crude futures rose 40 cents to $44.80 a barrel while the US West Texas Intermediate (WTI) crude futures climbed 50 cents to trade at $41.72 per barrel, reported Reuters.
Saudi Aramco president and CEO Amin Nasser said that oil demand is gradually increasing in Asian markets as different countries relax Covid-19 related restrictions.
The market received further support after Iraq reiterated its commitment to the OPEC-led supply cut deal.
The Middle East nation said that it will trim its output by an additional 400,000bpd in August and September to balance its overproduction in the last three months.
With this announcement, Iraq’s total reduction will amount to 1.25Mbpd for the two months.
In a joint statement, the Saudi and Iraqi energy ministers also noted that the supply cuts will help in stabilising the market.
AxiCorp market strategist Stephen Innes was quoted by Reuters as saying: “Saudi Arabia and Iraq forging better relationships over the oil deal are excellent for the compliance outlook.”
The oil market is also supported by renewed hopes of a stimulus deal to support the US economy. Earlier, talks on the deal stalled following disagreements between the Republicans and Democrats.
However, US House Speaker Nancy Pelosi and US Secretary of Treasury Steven Mnuchin expressed their intention to resume talks.