The week began with a spot of good news for markets.
Ahead of OPEC’s meeting on 25 May, Saudi Arabia and Russia came out in favour of extending the output cuts until March 2018.
The show of support from the world’s two largest oil producers was a welcome surprise to markets and helped oil prices rebound to their high points earlier in the month.
The price of Brent Crude was up to $52.14 per barrel, while the West Texas Intermediate index was trading at $49.10 p/b, up from $47.85 p/b.
Both the West Texas Intermediate and Brent Crude indexes slumped in the beginning of May as expectations around rebalancing supply and demand were deemed “overly optimistic” and Chinese economic data softened.
Chinese president Xi Jinping’s $124bn “Silk Road” fiscal stimulus announcement over the weekend also undoubtedly influenced the oil price recovery on Monday.