Brent Oil Price up With Further OPEC Output Cut Hopes

Brent Oil Price up With Further OPEC Output Cut Hopes
Δευ, 1 Ιουνίου 2020 - 15:21

Brent crude oil was up by more than 6% on Monday as investors are hoping the Organization of Petroleum Exporting Countries (OPEC) will decide to make deeper crude production cuts at their meeting this week

The international benchmark was trading at $37.72 per barrel at 0640 GMT for a 6.7% gain after closing Friday at $35.33 a barrel.

American benchmark West Texas Intermediate (WTI) was almost unchanged at $35.47 a barrel at the same time after ending Friday at $35.49 per barrel.

OPEC and non-OPEC oil-producing nations are expected to meet sometime this week to discuss the possibility of making deeper cuts in their crude production levels.

The 23-nation group, dubbed as OPEC+, had agreed in April to lower their total oil output by 9.7 million barrels per day (bpd) from May 1 through June 30.

On April 12, the group agreed to ease the cuts to 7.7 million bpd from July 1 to Dec. 31 this year, which then will be followed by a 5.8 million bpd adjustment for a period of 16 months, from Jan.1, 2021 to April 30, 2022.

Members of OPEC+ are expected to discuss whether the group's production curb in the second half of 2020 should be deepened in the face of coronavirus-related weak global oil demand.

As quarantine measures as softened in major economies in Asia, Europe and North America, global oil consumption is estimated to pick up in the second half of this year.

On the supply side, output from the world's largest crude oil producer, the US, is expected to continue falling in the near term.

The number of oil rigs, an indicator of short-term production in the country, fell by 15 to reach 222 for the week ending May 29, from 237 the previous week.

This marked the 11th consecutive weekly decline in the US oil rig count, according to the latest data by oilfield services company Baker Hughes on Friday.

(Anadolu Agency, June 1, 2020)

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