July 14, 2024
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Prices of Oil Surge High Amid Expectations of Tighter Supply from Opec Cuts

The prices of oil rose on Monday. This development came amidst expectations of tighter supply from OPEC+ cuts, attacks on Russian refineries and as upbeat Chinese manufacturing data supported outlooks for improving demand.

Brent crude rose 29 cents, or 0.3%, to $87.29 a barrel by 0331 GMT after rising 2.4% last week. U.S. West Texas Intermediate crude was at $83.48 a barrel, up 31 cents, or 0.4%, following a 3.2% gain last week.

Both benchmarks finished higher for a third consecutive month in March, with Brent holding above $85 a barrel since the middle of last month, as the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, pledged to extend production cuts to the end of June which could tighten crude supply during summer in the Northern Hemisphere.

Because of the easter break, several countries are closed. As a result, volumes are expected to beslim on Monday.

Russian Deputy Prime Minister Alexander Novak , had on Friday mentioned that the country‘s oil companies will focus on reducing output rather than exports in the second quarter in order to evenly spread production cuts with other OPEC+ member countries. Also, Russia’s fuel exports is expected to reduce due to Ukranian drone attacks that have destroyed several of its refineries.

In Europe, oil demand was firmer than expected, rising 100,000 bpd on year in February, Goldman Sachs analysts said, versus its forecast of a 200,000 bpd contraction in 2024.

Crude oil production by the United States, the world’s largest producer, dropped 6% in January from December’s record high, following freezing weather, data from the Energy Information Administration showed on Friday.

Investors look forward to U.S economic data for changed that will support the global economy and oil demand.

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