Oil prices have edged up as the Organization of the Petroleum Exporting Countries (OPEC) and its partners are set to extend output cuts until at least the end of 2019 at their meeting in Vienna.
Brent crude futures for September delivery increased $1.89 as high as $66.75 a barrel, while US crude futures for August climbed $1.67 to $60.14 a barrel, Reuters reported.
Joining Saudi Arabia, Iraq and Russia, Iran supported a policy which is aimed at increasing the price of oil prices amid a weakening global economy. OPEC, Russia and other producers, an alliance known as OPEC+, meet on 1 and 2 July to discuss an agreement with regard to the extension of supply cuts amid surging US output.
PVM analyst Tamas Varga told Reuters: “Clearly, the producer group is more than willing to sacrifice market share for a balanced market. The prize of this sacrifice is there for everyone to see: the two main crude oil futures contracts are up more than $1.50 a barrel this morning.”
Russia President Vladimir Putin has agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (Mbpd) by six to nine months. Saudi Energy Minister Khalid al-Falih said that the deal would most likely be extended by nine months.
SEB’s Bjarne Schieldrop further said: “If Russia, Saudi Arabia and the other key OPEC members keep production at the levels they produced in H1-19 they will ensure that the global oil market is not flowing over.”
Due to rising US supplies and a slowing global economy, oil prices have come under renewed pressure in recent months.