Oil rates soar with predictions of new OPEC+ output cuts

(MENAFN) Oil prices rose on Monday ahead of the anticipated OPEC+ meeting, with expectations that the group will extend its current output cuts through January.

The international benchmark, Brent crude, traded at USD81.28 per barrel at 09:49 a.m. local time (0649 GMT), marking a 0.83 percent increase from the closing price of USD80.61 a barrel in the previous trading session on Friday. Simultaneously, the American benchmark, West Texas Intermediate (WTI), traded at USD76.75 per barrel, reflecting a 0.93 percent rise from Friday’s close of USD76.04 per barrel.

Although both benchmarks experienced a downward trend last week due to reduced concerns about the impact of the Israel-Palestine conflict on oil trading routes, prices rebounded on the first day of the week. Investors factored in the likelihood that Saudi Arabia, OPEC's swing producer, would prolong its 1 million barrels per day (bpd) production cut for at least another month.

The 23-member OPEC+ group had been reducing output to maintain market stability amid signs of weak demand in China. However, recent data indicating China's economic recovery from the COVID pandemic has influenced market dynamics. In its monthly oil report, OPEC forecasted increased demand in 2024, supported by solid global economic growth and ongoing improvements in China.

OPEC+ ministers are scheduled to convene on Sunday to determine their next production pact. Experts anticipate that any decision made during the meeting will have a short-term positive impact on oil prices.


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