Oil prices surge as markets await key OPEC+ meeting on output reductions
Date
5/27/2024 4:09:03 AM
(MENAFN) Oil prices increased in early Asian trading on Monday, with the market's attention focused on the upcoming OPEC+ meeting scheduled for June 2. At this meeting, oil producers are expected to deliberate on maintaining voluntary production cuts for the remainder of the year. By 0345 GMT, brent crude futures had risen by 17 cents, reaching USD82.29 a barrel, while the more actively traded August contracts saw a 13-cent increase to USD81.97 a barrel. Similarly, West Texas Intermediate (WTI) crude experienced a 21-cent rise, bringing it to USD77.93 a barrel.
Trading activity is anticipated to be subdued due to a public holiday in both the United States and Britain on Monday. The Organization of the Petroleum Exporting Countries (OPEC) announced on Friday that the OPEC+ meeting would take place online on June 2. During this meeting, producers will discuss the continuation of voluntary production cuts amounting to 2.2 million barrels per day for the second half of the year. According to Reuters, three sources from OPEC+ indicated that these cuts are likely to be extended.
These voluntary cuts are in addition to existing production reductions of 3.66 million barrels per day, which are set to remain in effect until the end of the year. Combined, these cuts account for approximately six percent of global oil demand. The anticipation surrounding the OPEC+ meeting and its potential impact on oil supply has contributed to the recent rise in oil prices, reflecting the market's sensitivity to production decisions by major oil producers.
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