US legislators approved a nearly $500bn bill for relief from the pandemic. Credit: Steve Jurvetson.

Oil prices have achieved gains as the OPEC producer Kuwait announced plans to cut supplies to global markets.

According to Reuters, Brent crude (LCOc1) trading was up $1.07 to $22.40 a barrel. It surged 20% in the previous session. US oil gained $1.12 at $17.62 a barrel.

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Oil prices further gained some support as the US approved another package to manage the economic disruption caused by the Covid-19 outbreak.

ING was quoted by the news agency as saying in a note: “There is little in the way of fundamental developments to support the move higher, although given the amount of weakness recently, we were due a relief rally.”

Production cuts from OPEC+, a group including OPEC countries and other oil producing nations such as Russia, will be effective from next month.

The group has agreed to cut output by a record 9.7 million barrels per day (bpd), to counter the collapse of prices due to the virus outbreak which shred the fuel demand.

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KUNA, the state news agency of Kuwait, said that the country will begin supply cuts to markets across the globe without even waiting for the official start of the output cut deal.

Meanwhile, legislators in the US approved a nearly $500bn package for relief from the pandemic. The relief package will offer support to small businesses and hospitals.

With this package, US spending on the coronavirus crisis increases to about $3trn so far.

Capital Economics said in a note: “The disruption relating to the coronavirus is set to cause the steepest fall in global GDP since the Second World War.

“Once the virus is under control, (economic) output should rebound, but it will take years to return to its pre-virus path.”