Crude oil prices extended the market gains in Asia, the Middle East and several other global markets, as prices touched $40 a barrel. This swing is an up from just above $34 a barrel in the beginning of March.

This strengthening lifts crude prices by more than 35 per cent from the lowest point they reached last February, when prices dropped to below $28.

This price rally provides much-needed sustenance for the Middle East’s markets, especially those of Saudi Arabia and other oil-exporting countries in the Gulf region.

While it is unclear as to any specific action or announcement that can be given credit for this surge, a couple of events that have occurred over the past few weeks could be leading factors.

The agreement reached between producers Saudi Arabia and Russia to freeze oil production at January levels is seen to have had an impact on general sentiment. Saudi Arabia, the world’s largest oil exporter, has even increased the official selling price of its light crude by 25 per cent per barrel, to be applied to April’s shipments going to Asia. It is also applying a discount of $0.75 a barrel for the regional market, down from the $1 discount applied in March.

While observers see such actions as right steps on the path to recovery, definite concerns about the oversupply of oil still remain.