2020.05.1219:21:00UTC+00Oil Futures Settle Sharply Higher

Crude oil prices climbed higher on Tuesday as traders created fresh long positions on hopes output cuts by major producers will for now help offset concerns about outlook for energy demand.

The U.S. Energy Information Administration in its latest report, has lowered its forecast for U.S. crude production for the year 2020.

Major oil producers Saudi Arabia, Kuwait and U.A.E. have stated that they would cut outputs beyond what they had committed as part of the OPEC+ agreement recently.

West Texas Intermediate Crude oil futures for June ended up $1.64, or about 6.8%, at $25.78 a barrel.

Brent Crude futures advanced $$0.35, or 1.2%, to $29.98 a barrel.

Saudi Arabia has said it would cut production by a further 1 million barrels per day next month, bringing down its output to 7.5 million barrels per day. The U.A.E. and Kuwait have pledged to cut an additional 180,000 barrels per day in today.

Traders now await weekly crude oil reports from the American Petroleum Institute (API) and Energy Information Administration, due later today, and at 10.30 AM Wednesday, respectively.