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Oil leaps as major producers look to extend record production cuts through July

Business Insider logo Business Insider 6/2/2020 bwinck@businessinsider.com (Ben Winck)
a person standing on top of a grass covered field: FILE PHOTO: An oil pumpjack operates near Williston Reuters © Reuters FILE PHOTO: An oil pumpjack operates near Williston Reuters
  • Oil continued its climb to past highs on Tuesday amid reports that OPEC+ members are eyeing extensions to record production cuts.
  • Major producers including Russia want to keep cuts set to end in June in place for one more month, Bloomberg reported Monday.
  • Saudi Arabia, OPEC's de facto leader, is reportedly in favor of a one- to three-month extension.
  • West Texas Intermediate crude futures gained as much as 3%, to $36.51 per barrel, on the news. Brent crude, oil's international benchmark, leaped 3.2% to $39.55 at intraday highs. 
  • Watch oil trade live here.

Oil surged on Tuesday on reports that OPEC+ members want to extend record production cuts for at least one month.

West Texas Intermediate crude futures jumped as much as 3% higher, to $36.51 per barrel, in early trading. Brent crude, oil's international benchmark, soared as much as 3.2% to $39.55 at intraday highs.

The world's biggest producers are set to meet this week to discuss the battered commodity market and whether additional supply cuts are needed to facilitate recovery. Russia and several other OPEC+ members are eyeing a one-month extension to cuts set to end in June, Bloomberg reported Monday afternoon. Saudi Arabia, OPEC's leading member, is reportedly in favor of extending cuts one to three months longer.

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The global oil coalition decided on April 12 to slash production by a record 9.7 million barrels per day in May and June. The move brought must-needed relief to the market recently beset with flooded inventory and plummeting prices.

Crude prices remain well below the levels they enjoyed before Saudi Arabia and Russia kicked off a price war on March 6. While the two benchmarks have plenty of losses to retrace before a full rebound, both staged strong rallies through May as storage pressures eased and supply stabilized.

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