View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
March 5, 2021

Crude oil prices surge as OPEC+ decides to extend supply cut

Crude oil prices increased after OPEC and its allies agreed to extend oil supply cuts into April as they expect a stronger demand recovery amid the Covid-19 pandemic.

By Umesh Ellichipuram

Crude oil prices increased after OPEC and its allies agreed to extend oil supply cuts into April as they expect a stronger demand recovery amid the Covid-19 pandemic.

Brent crude climbed by $0.10, or 0.2%, to reach $66.84 a barrel while the US West Texas Intermediate (WTI) crude futures rose by $0.17, or 0.3%, to reach $64.00, reported Reuters .

The increase in two contracts by more than 4% follows the decision by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, not increase oil output, except to Russia and Kazakhstan.

CMC Markets chief market strategist Michael McCarthy said: “It just goes to show how much of a surprise the OPEC+ discipline is.

“What makes the gain even more impressive is that it comes against a risk-off backdrop and a higher US dollar.”

Saudi Arabia previously voluntarily agreed to maintain a cut of one million barrels per day until April, despite the recovery of the oil prices over the past two months.

Commonwealth Bank commodities analyst Vivek Dhar was cited by the news agency as saying: “The group’s supply discipline shows that Saudi Arabia’s preference for caution is being adhered.”

Analysts are making price forecast review pertaining to the OPEC+ oil supply cuts, as well as US shale producers who seek to improve returns to investors by curbing spending.

OANDA analyst Edward Moya was reported by Reuters as saying: “Oil prices could rip higher now that a tight market is likely up through the summer. WTI crude at $75 no longer seems outlandish and Brent could easily top $80 by the summer.”

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology