The global oil market is rebalancing after oil producers managed the tightening in the oil market. The OPEC and its oil-producing allies are going to keep the production steady through April. Saudi Arabia has decided to extend its voluntary cut of one million barrels per day into April. Because of the largely unchanged output, Brent crude prices rose to nearly $70 a barrel.
Despite the oil price rally OPEC sees a cautious optimism due to the underlying uncertainties in the physical oil market fundamentals. However, the positive U.S. nonfarm payroll report and the encouraging economic developments in Asia supported the rebound in oil prices to pre-pandemic levels. If the oil prices stay at current levels, the consumption led recovery could be threatened, said India, the world’s third biggest oil importer. The higher oil prices provide otherwise more fiscal space for most Arab gulf countries to balance their national budgets and to support their economic recovery this year.