Oil Prices Surge on Tighter Supply Optimism Ahead of OPEC+ Decision
Optimistic Outlook for Oil Prices
Oil prices reached nearly four-month highs on Friday, driven by growing confidence in tighter global supply conditions. The focus now shifts to a potential announcement by OPEC+ in the upcoming week.
Positive Price Movements
By 14:30 ET (19.30 GMT), oil futures settled 2.2% higher at $79.97 a barrel, briefly surpassing $80 a barrel intraday for the first time since November 7, 2022. The Brent contract also climbed 2.1% to $83.94 a barrel, marking a two-month winning streak.
Anticipation for OPEC+ Decision
OPEC+ is expected to decide on extending production cuts next week, aiming to maintain about 2.2 million barrels per day that were agreed upon in November. This decision has raised hopes for tighter global crude supply amidst concerns about non-OPEC output and weakening Chinese demand.
Expansion in Rig Counts
The number of oil rigs operating in the U.S. rose to 506, the highest since September, as domestic refiners gradually increase activity post weather-related disruptions. Despite this, rig counts remain below levels needed to sustain current production, according to ANZ Research. Domestic production slightly declined to 13.315 million barrels per day in December.
Contributors to the Article
This article was contributed to by Peter Nurse and Ambar Warrick, highlighting the key factors driving oil prices and supply dynamics in the current market environment.
