The U.S. benchmark oil price traded above 40 dollars per barrel on Monday.
The first time it has done so since March, after major oil producers agreed to stick to their current output restrictions for one more month.
While U.S. brand West Texas Intermediate added around 2 per cent to reach 40.44 dollars, European Brent oil climbed nearly 3 per cent to 43.41 dollars.
The Organisation of the Petroleum Exporting Countries in Vienna and a Russia-led group of aligned countries, known as OPEC+, decided on Saturday to keep in place an output cut of 9.7 million barrels per day (bpd) until the end of July.
The group had first decided upon this reduction in April, to prop up prices that were under pressure from the coronavirus crisis and the ensuing drop in demand for transport fuel and oil-based chemicals.
While OPEC+ has achieved their aim of reversing the price decline, analysts said on Monday that the current upward trend will not be sustainable.
Oil watchers at the Vienna consultancy JBC Energy pointed out that prices have been supported by massive oil imports into China, which could bring its buying down to normal levels soon as oil becomes more expensive.
On the supply side, some Libyan oil fields are set to restart production soon, while OPEC+ member Mexico opted out of Saturday’s extension deal.
“We cannot shake the feeling that, price-wise, this market has gotten a bit ahead of itself,’’ JBC Energy said in an analysis, predicting that prices will drop unless some other price-pushing factors appear.
