Brent crude oil has breached the $60 per barrel mark, reaching its highest level since July 2015 on the back of expectations that the consortium of producers led by OPEC will extend the production cut currently in-place.
The international benchmark for oil prices was trading at $60.73 per barrel at one point, representing an increase of 0.15% over their last settlement, while the US West Texas Intermediate (WTI) crude futures rose by 0.2% to trade at $54.01 per barrel, Reuters reported.
However, growing exports from Iraq ensured the prices remained under control.
ANZ bank was quoted by the news agency as saying: “With strong compliance to OPEC’s production curbs already supporting prices, comments from the Saudi Arabian Crown Prince that suggested the production cut agreement should be extended added to gains.”
Earlier this year, the OPEC and other producers including Russia agreed to cut oil production by about 1.8 million barrels per day (bpd).
The agreement runs until March next year and is expected to be extended, with Saudi Arabia and Russia putting their weight behind the proposal to secure a further extension.
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A decision on this is scheduled to be taken at OPEC’s headquarters in Vienna, Austria, next month.
The export capacity from Iraq’s southern ports increased by 900,000bpd to 4.6 million bpd, preventing further increase in Brent prices.
US production is said to have gone up by nearly 13% since mid-last year, leading to a WTI discount of $6.50 per barrel against Brent.