Oil prices rose on Thursday as a panel of OPEC and its allies met to review record oil supply cuts, even as the market remained concerned about additional coronavirus cases reported in parts of the United States and China.
Brent crude futures were up 78 cents at $41.48 a barrel and West Texas Intermediate crude futures gained 88 cents, or 2.32%, to settle at $38.84 per barrel.
"You're going to see more OPEC compliance," said Phil Flynn, senior oil analyst at Price Futures Group in Chicago. "I think we'd be a lot higher if it weren't for these coronavirus fears."
An OPEC+ ministerial panel met on Thursday to review record oil supply cuts and plans by countries such as Iraq and Kazakhstan to improve compliance with quotas to support oil prices battered as demand plunged by up to a third during the pandemic.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output by a record 9.7 million barrels per day (bpd) or 10% of global supply since May 1.
Thursday's discussion was unlikely to recommend an extension of record cuts into August, sources said. OPEC+ compliance with production cut commitments in May was 87%, two OPEC+ sources said on Wednesday.
Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools while several U.S. states, including Texas, Florida and California, reported sharp increases in new cases.
A second straight weekly rise in U.S. crude stockpiles to a record high also weighed on sentiment, but U.S. government data showed lower inventories of gasoline and distillates, indicating higher demand.
OPEC warned in a monthly report that the market would remain in surplus in the second half even as demand improves, saying it now expects supply from outside the group to be about 300,000 bpd higher than previously thought.