Shafaq News / Oil prices rise 2 percent on Wednesday, supported by a sharp drop in crude stocks in the United States, but the gains were restricted by the movement of OPEC and its allies to reduce supply cuts starting in August with the global economy gradually recovering from Covid-19.

Brent crude contracts ended the world record for the closest trading session due 89 cents, or 2.1 percent, to settle at the settlement of $ 43.79 a barrel.

US benchmark West Texas Intermediate crude futures rose 91 cents, or 2.3 percent, to settle at $ 41.20 a barrel.

Prices received a boost after data from the US Energy Information Administration showed that crude stocks in the United States fell 7.5 million barrels last week, compared to expectations of analysts polled by Reuters for a decrease of 2.1 million barrels.

"The report suggests that we will see more declines in stocks in the coming weeks," said Phil Flynn, an analyst at Price Futures Group.

“We will see a drop in supplies and the market indicating that we will need more oil soon, maybe in August” He added.

OPEC + has cut production since May by 9.7 million barrels per day, or 10 percent of global supply, after the virus destroyed a third of global demand.

After July, production cuts are expected to shrink to 7.7 million barrels per day until December.

Saudi Energy Minister Abdulaziz bin Salman bin Abdulaziz Al Saud said that OPEC + is in the process of moving to the next stage in its agreement for oil cuts when it is expected to reduce production cuts as oil demand recovers.

FOR ITS PART, Russian Energy Minister Alexander Novak said a partial recovery of production would benefit the market and that Russia would increase its oil production by about 400,000 barrels per day from August.

OPEC said on Tuesday that it expects demand for oil to recover by seven million barrels per day in 2021 after falling by about nine million barrels per day this year.

Oil prices were also supported by promising preliminary data on a possible vaccine for Covid-19, but a jump in the number of  infections in the United States and other countries keeps tension between dealers.