Connect with us

Hi, what are you looking for?

Commodities & Futures

Oil In Sight of $65 as OPEC+ Supply Shock Feeds Powerful Rally

Commodities1 hour ago (Mar 04, 2021 08:09PM ET)

(C) Reuters. Oil In Sight of $65 as OPEC+ Supply Shock Feeds Powerful Rally

(Bloomberg) — Oil rallied toward $65 a barrel after OPEC+ chose not to relax supply curbs even as the global economy pulls out of its pandemic-driven slump, confounding widespread expectations the group would loosen the taps.

West Texas Intermediate edged higher after being up as much as 1% earlier, building on Thursday’s 4.2% surge to the highest close since April 2019. The producer alliance agreed to hold output steady in April, while Saudi Arabia said that it will maintain its 1 million barrel-a-day voluntary production cut.

See also: Saudis Bet ‘Drill, Baby, Drill’ Is Over in Push for Pricier Oil

Crude has soared this year, shepherded higher by OPEC+ restraining supplies and the vaccine-aided recovery in consumption that’s drained inventories. The group’s decision represents a victory for Riyadh, which has advocated for restraints to keep prices supported. However, the rally could spur drilling activity by U.S. shale explorers, and stoke global inflationary pressures.

The Organization of Petroleum Exporting Countries and its allies including Russia had been debating whether to restore as much as 1.5 million barrels a day of output. As part of the agreement, which was struck at a virtual meeting on Thursday, Russia and Kazakhstan were granted exemptions. The group’s next meeting is set for April 1 to discuss production levels for May.

Saudi Energy Minister Prince Abdulaziz bin Salman continues to urge caution in the face of uncertainties, insisting it is better to err on the side of prudence than opt for an ill-timed supply increase, RBC Capital Markets said in a note. Reviving shale production does not appear to be a principal concern, it said.

Evidence of the resurgence in demand continues to emerge, especially in Asia. Gasoline and diesel consumption in China has extended its run above pre-virus levels this year after the faster-than-expected return of factory activity and infrastructure building following the Lunar New Year holiday.

In addition to the fallout from the OPEC+ shock, investors will also look to commentary on Friday from China’s National People’s Congress, the nation’s biggest political meeting of the year. The gathering carries added significance this year with the Communist Party’s unveiling of its new five-year plan.

(C)2021 Bloomberg L.P.

Oil In Sight of $65 as OPEC+ Supply Shock Feeds Powerful Rally

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Wisegazette.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Wise Gazette. All Rights Reserved