Frank Kane

DUBAI: The rebound in oil prices grew on Tuesday amid fresh signs that world economies are recovering from the COVID-19 pandemic.

Brent, the global benchmark, touched $44 a barrel at one stage in European trading — its highest level since early March — as more countries lifted lockdown restrictions.

Stock markets also took heart from hopes of an end to trade confrontation between China and the US, when President Donald Trump said a deal was “fully intact.”

Oil traders digested a new report from experts at consultancy Energy Aspects showing that the fall in demand because of the pandemic was significantly lower than previously estimated.

Chief oil analyst Amrita Sen said: “It turns out that global oil demand fell by less than 20 percent, around 18.5 million barrels per day at the height of the COVID-19 lockdowns in April, when most of the northern hemisphere — home to 90 percent of global manufacturing — was shut down.”

Many analysts calculated at the time that the lockdowns had reduced global demand by about 30 million barrels a day.

While that is good for the global economic recovery, it puts oil producing nations in a quandary. The historic cuts in output agreed in April by the OPEC+ alliance led by Saudi Arabia and Russia “were more severe than required,” Sen said.

More supply has since been taken out through voluntary cuts by Saudi Arabia and others, and a strict compliance regime.

Some OPEC+ members want the current reduction level of 9.6 million barrels per day to be extended for a further month, but Russian officials see no need for the cuts to be extended.

Rising demand and a drawdown of stocks would be ammunition for Russia and others who want to add supply when the current cuts deal expires at the end of June.