Brent oil price hit its highest level in 12 months after pandemic-driven concerns over a supply glut were eased with massive output cuts of major oil producers.

International benchmark Brent crude was trading at $57.84 per barrel at 0720 GMT for a 0.07% rise after closing Tuesday at $57.80 a barrel. This is the highest level since Feb. 24 last year when it traded at $57.80.

American benchmark West Texas Intermediate (WTI) traded at $55.09 per barrel at the same time for a 0.60% increase after it ended the previous session at $54.76 a barrel.

The voluntary cuts of 1 million barrels per day (BPD) of OPEC’s de facto leader Saudi Arabia, which began at the start of February and will run through March, drove the oil price hike.

Prices are still under pressure from low global demand caused by the Coronavirus pandemic, but the massive OPEC+ output cut was a shot in the arm to balance supply-demand fundamentals in the oil market.

“OPEC’s main player Saudi Arabia’s move to slash 1 million BPD reflects all in all that the outlook for the global economy is still not very clear even if OPEC+ sees a recovery of up to 4% of growth after a disastrous 2020,” Political Risk and Oil Analyst Jose Chalhoub told Anadolu Agency.

“In this sense and after watching positive upward reactions of prices, with both Brent and WTI reaching fresh record highs, it will be interesting to see in the coming months how OPEC+ will positively calibrate the market share interests of some heavy players in the bloc,” he added.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 4.27 million barrels in US crude oil inventories relative to the market expectation of a 367,000-barrel rise.

If crude stocks fall in line with the API’s expectations, it signals a rebound in crude demand in the US, the world’s largest oil consumer, to positively support prices.

Hopes of further US stimulus measures are also buoying bullish oil prices.

Democrat lawmakers in the US Senate started debating the inclusion of a COVID-19 relief pack in its fiscal 2021 budget resolution. This is the first step towards passing the $1.9 trillion stimulus package pledged by US President Joe Biden.

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