Crude oil is starting the fresh trading week on a bullish footing, with UK Brent oil crossing the key $70 level, as the sentiment receives a boost from an extension of deeper production cuts by OPEC+ nations as well as increasing expectations about recovery in the global economy and oil demand. At the time of writing, WTI crude oil is trading at around $66.08 per barrel.

In early trading on Monday, WTI oil prices strengthened by as much as 0.4% after reports that Saudi Arabia has curtailed the supply of next month’s crude to around four buyers from North Asia by as much as 15%. Meanwhile, the de facto leader of OPEC has maintained the normal levels of supply to Indian refiners.

Earlier this month, OPEC and its allies had taken a collective decision to continue with deeper supply cuts into April on account of considerable uncertainty about the global economic outlook despite the optimism surrounding the rollout of COVID-19 vaccines worldwide. While hopes that the distribution of vaccines can ease the pressure off the global economy and prevent further lockdowns has supported oil prices lately, there is also uncertainty about the possible discovery of new strains of the virus derailing the progress and forcing governments to reimpose lockdowns and restrictions, as was the case with Europe towards the end of last year.

The mood in oil markets has been further boosted by positive economic data releases from China earlier today. A surge in industrial output as well as retail sales in the world’s second largest energy consumer has driven crude oil prices higher on hopes for improvement in oil demand.