Oil prices are trying to continue the rebound in trading on Friday (24 / April) because it is supported by positive sentiment from the commitment of one of the OPEC Plus members to cut production. The price of WTI (West Texas Intermediate) oil is currently in the range of $ 14.88 per barrel, while the price of Brent oil is at the level of $ 22.6 per barrel.

Although both continued to advance from the previous day, both WTI and Brent oil were not yet separated from the downward trend which pushed prices down to historic lows. This condition reflects that the bearish shadows are still so dominant and the energy market has not found a solid footing for a significant rally.

Responding to the OPEC Plus agreement to cut oil production by 9.7 million barrels of oil per day (BPD) in May, Kuwait decided to move quickly in cutting production, to offset the drop in global demand in recent months.

For information, Kuwait is the fourth-largest oil producer in the OPEC body, just behind Saudi Arabia, Iraq, and the United Arab Emirates. As of March 2020, the country produced output of up to 2.84 million BPD, up 170,000 BPD from the previous month.

Global GDP Hit by Corona Pandemic

According to a report by the Kuwaiti news agency, KUNA, producers in Kuwait will soon cut oil output before the start of the officially agreed-upon production cut, on May 1. The urgency of cutting oil production is driven by the current weak global economic conditions, which are predicted to continue for the coming months. Such a gloomy outlook makes the oil demand projections lackluster.

"The disruption caused by the Covid-19 pandemic has hit global GDP into the worst conditions since World War II ... After the virus has subsided, it will take years for the world economy to recover as it used to," Capital Economics said in a note. He referred to global economic predictions which revealed a chance of a contraction of up to 5.5 percent this year, worse than the 0.5 percent contraction in the previous forecast.

Crude oil prices continued the slump for the fourth straight day. After the announcement of a disappointing OPEC + oil production cut last week, it turns out the United States is also experiencing difficulties in reducing its production. Uncle Sam's country is the largest oil producer in the world today.

WTI oil prices have recorded a daily decline of almost 2.5 percent in the range of USD20.90 per barrel. Brent even collapsed 2.75 percent to a range of USD28.00 per barrel. In the week period ended April 10, 2020 there was an increase in the US crude oil inventory of 13.1 million barrels, this has been reported by the Petroleum Institute. The data exceeded analyst expectations of only 11.7 million barrels.

Rising Oil Prices Make US a Stumbling Block

"The release of short positions by investors has been confirmed by an increase in US crude stockpiles," said Kazuhiko Saito, chief analyst at Fujitomi, as reported by Reuters. In fact, according to him, since before the release of the API report, investors have taken aggressive selling action due to the expectation of a sizable stock increase.

The United States is now a stumbling block in various countries' efforts to boost oil prices. Following the informal agreement with the OPEC + cartel, the United States will also cut oil production.

However, it is voluntary for private oil and gas companies. In this situation, some Texas oil and gas companies insist on refusing to reduce their production on the pretext that the move will further complicate the condition of the company.

On the other hand, some hopes for the rise of oil prices have begun to emerge. There are rumors that the International Energy Agency (IEA) will purchase up to several million barrels to boost demand during the COVID-19 pandemic.