Opec and allied manufacturing nations have affirmed plans to restore 2.1 million barrels of crude per day of oil supply, balancing concern that ongoing COVID-19 infestations in certain countries may drain demand against growing demand for energy in rebounding economies all through the world.

The decision was taken by energy ministers in an online session on Tuesday Saudi Energy Minister Prince Abdulaziz bin Salman said Tuesday that current market events demonstrated that the plan to progressively boost output, first announced in April and reiterated on Tuesday, was “the correct decision.” He stated there were still "clouds on the horizon" in terms of economic recovery and energy consumption.

The organization chose to stick to the original decision to increase output by 2.1 million barrels per day from May to July. In June, the group expected to add 350,000 barrels per day, backed by 440,000 barrels per day in July. Simultaneously, Saudi Arabia is progressively restoring 1 million barrels of voluntary reduction taken more than the group pledge.

The combined Opec Plus arrangement of members led by Saudi Arabia and non-members, the most prominent of which is Russia, is concerned that additional COVID-19 infestations in nations like India, a key oil user, may harm global demand and pressure on prices.

Oil-producing countries have made significant cuts to maintain prices in the severity of the economic downturn in 2020 and now must assess how much extra oil the market requires as producers gradually increase output.

The economic rebound in the United States, Europe, and Asia is likely to boost energy consumption in the second half of the year because people commute more and use more fuel, either gasoline or jet fuel. The driving season in the United States began during Memorial Day weekend, but a rising number of Americans have been immunized, permitting individuals to feel freer to drive and take longer travels by car.

The cost of benchmark US crude jumped 3.6% to $68.66 on Tuesday. Brent crude, the European benchmark, went 2.7 traded 2.7% higher at $71.17.

Another element affecting market forecasts is the likelihood of more Iranian oil entering the market, based on the conclusion of discussions over Iran's nuclear programs.

Oil prices had surged by more than 30% since the beginning of the year. This has resulted in greater expenses for motorists in the United States, wherein crude is around half the price of a gallon of gasoline. Gas prices for holiday visitors were the highest after 2014, with a nationwide average of $3.03 per gallon, $1.12 higher than last year. Prices were significantly higher in the western regions, with Californians paying $4.20 a gallon.

Brent is raising $2, reaches the highest level since March on the back of increased demand. Oil prices surged on Tuesday, with Brent exceeding $71 and trading at its peak point since March, on forecasts of rising gasoline consumption in the United States mostly during summer driving season, as Opec+ agreed to increase output.

Prices too were buoyed by statistics from China, which showed that the country's manufacturing activity rose at its quickest pace this year in May.

Brent oil futures rose $2.01, or 2.9%, to $71.33 a barrel at 1401 GMT, the highest intra-day price till March 8.

The July price of West Texas Intermediate oil in the United States was $68.85. These were up $2.53, or 3.8% from the previous day's closing, with no settlement price for Monday due to a U.S. national holiday.

“Oil prices are climbing today as the market gains confidence that demand is nearing the end of its recovery, with strong consumption signals coming from the United States to China,” said Louise Dickson, oil markets analyst at Rystad Energy.

As per the tracking company GasBuddy, U.S. fuel demand on Sunday, which coincided with the Memorial Day weekend, increased 9.6 % over the previous four Sundays.

“The bull-recipe for the oil market stays unchanged: rising demand, muted U.S. shale oil reaction, and restricted and constrained supply from Opec+, culminating in continued drops in stocks and consequently higher oil prices,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.

Given a large number of coronavirus cases in India, the world's third-largest oil consumer, Opec+ decided in April to return 2.1 million barrels per day (bpd) of supplies to the market from May to July, expecting increased global demand.

On Tuesday, European stocks set new highs as robust metal and oil prices supported shares of large commodities businesses, and data indicated eurozone industrial activity increased at a record rate in May.

The pan-European STOXX 600 index rose 0.8 % on the first trading session of June, while the blue-chip index in the United Kingdom rose 0.8 percent following a vacation on Monday.

The German DAX increased by 1.0 % to a new record high, while France's CAC 40 increased by 0.7 %.

The final reading of eurozone industrial activity by IHS Markit increased to 63.1 in May, up from an earlier 62.8 "flash" projection and the biggest since the poll started in June 1997.