Oil prices rise as OPEC+ agree on ‘small’ production cut

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Oil prices increase

Singapore: As the OPEC+ countries on Monday agreed on a “small oil production cut to bolster prices”, crude oil prices jumped by nearly 2% early on Tuesday.

As of 12:15 am CDT (10:15 am PST), the US benchmark, WTI Crude, was trading at $88.81 a barrel. At the same time, the international benchmark, Brent Crude, was trading at $95.02. On Friday last week, the prices of WTI Crude and Brent crude were at $87.03 and $93.02 per barrel, respectively.

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Oil prices OPEC+

On Monday, the Organization of Petroleum Exporting Countries and allies led by Russia together called OPEC+, decided to reverse a 100,000 bpd increase for September after top oil producer Saudi Arabia and other members voiced concern about the fall in prices since June despite tight supply.

The oil producers will cut output by 100,000 barrels per day (bpd), amounting to only 0.1% of global demand, for October. They also agreed that OPEC’s leader Saudi Arabia could call an extraordinary meeting anytime if volatility persists.

However, analysts, who had not expected the agreement even after Saudi Arabia had said it wanted to shore up prices, said the production cut was mostly symbolic and had limited impact on actual supply given that OPEC+ had been producing below production targets.

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