Oil prices saw an uptick on Monday following an announcement from OPEC+ regarding the extension of current production cuts through 2025. However, gains were tempered by ongoing speculation surrounding a potential ceasefire in Gaza. Market sentiment was further dampened by concerns over subdued demand, exacerbated by disappointing purchasing managers index data from China, a key oil importer. Additionally, apprehensions regarding prolonged high interest rates contributed to the market’s apprehension, with crude prices recuperating from losses sustained in the previous week.
Brent oil futures expiring in August experienced a modest increase of 0.3 percent, reaching $81.33 per barrel. Concurrently, West Texas Intermediate (WTI) crude futures remained steady at $77.00 per barrel as of 21:06 ET (01:06 GMT). Notably, both contracts recorded declines ranging from 0.6 percent to 1 percent over the course of the preceding week.
OPEC+ convened on Sunday and resolved to prolong its ongoing production cuts. Spearheaded by major players such as Saudi Arabia and Russia, the alliance intends to maintain approximately 5.8 million barrels per day offline until early 2025. Specifically, it will uphold 3.6 million barrels per day of cuts until the conclusion of 2024, with an additional 2.2 million barrels per day set to be phased out between October 2024 and September 2025.
This decision, while anticipated by the markets, underscores OPEC+’s commitment to bolstering oil prices by fostering tighter market conditions. The cartel emphasized its readiness to await broader economic recovery and a decrease in interest rates before contemplating any production increases.
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Opec+ Announces Extension Of Supply Cuts, Gradual Return To Market
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