Oil Prices Slightly Increase as OPEC+ Extends Output Cuts
Oil Prices Tick Up After OPEC+ Decision
Oil prices saw a slight uptick on Monday as the OPEC+ group extended voluntary output cuts. Brent futures rose 14 cents to $83.69 a barrel, while U.S. West Texas Intermediate (WTI) climbed 3 cents to $80 a barrel.
Market Tightness Continues
The physical market tightness persists, with output cuts by the OPEC+ alliance reducing supply. ANZ analysts noted the ongoing worries about tensions in the Middle East contributing to the price rise.
Russia’s Additional Output Cuts
Russia announced additional oil output and export cuts of 471,000 bpd for the second quarter, aligning with OPEC+ decisions. This unexpected move aims to further stabilize the market amid global economic uncertainties.
Brent Spreads Widening
The low-sulphur crude markets are tightening, leading to wider Brent spreads. The prompt Brent intermonth spread increased to 92 cents a barrel, indicating expectations of tightening supply in the near future.
OPEC+ Unity and Determination
The OPEC+ group’s decision to maintain output cuts showcases a strong unity within the alliance. This move aims to support a price floor above $80 per barrel in the second quarter, emphasizing the determination to stabilize oil prices.
Geopolitical Tensions and Price Support
Rising geopolitical tensions, including the Israel-Hamas conflict and Houthi attacks, have supported oil prices. Concerns about economic growth continue to impact market dynamics, with ongoing conflicts influencing price movements.
U.S. Involvement in Ceasefire Discussions
U.S. Vice President Kamala Harris urged Hamas to agree to an immediate ceasefire and called on Israel to facilitate aid deliveries into Gaza. The U.S. has been actively involved in ceasefire negotiations, aiming to reach a truce before the start of Ramadan.
