Brent Price Hits $57.84 as OPEC+ Maintains Reduced Output Policy

Brent Price Hits $57.84 as OPEC+ Maintains Reduced Output Policy

Brent crude price hits $57.84 Thursday as the Organisation of the Petroleum Exporting Countries (OPEC) and allies of major producers stuck to a reduced output policy.

The price of OPEC basket of thirteen crudes stood at $57.72 a barrel on Wednesday, compared with $56.80 the previous day, according to OPEC Secretariat calculations

Meanwhile, the U.S. Energy Information Administration (EIA) reported a crude oil inventory draw of one million barrels for the last week of January.

Earlier today, benchmark Brent crude oil for April settlement edged up to $57.84 following Saudi’s output cut from February, 2021.

Market chart indicates that Brent crude price hits highest level in 12 months on account of the massive output cuts of major oil producers, and improved compliance among member countries.

It was noted that international benchmark for Brent crude was trading at $57.84 per barrel at 0720 GMT for a 0.07% rise after closing Tuesday at $57.77 a barrel.

“This is the highest level since February 24 in financial year 2020 when it traded at $57.80”.

American benchmark West Texas Intermediate (WTI) traded at $55.09 per barrel at the same time for a 0.60% increase after it ended the previous session at $54.76 a barrel.

The voluntary cuts of 1 million barrels per day (bpd) of OPEC’s de facto leader Saudi Arabia, which began at the start of February and will run through March, drove the oil price hike.

Meanwhile, oil traders said prices are still under pressure from low global demand caused by the Coronavirus pandemic.

However the massive OPEC+ output cut was a shot in the arm to balance supply-demand fundamentals in the oil market.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 4.27 million barrels in US crude oil inventories relative to the market expectation of a 367,000-barrel rise.

If crude stocks fall in line with the API’s expectations, it signals a rebound in crude demand in the US, the world’s largest oil consumer, to positively support prices.

Hopes of further US stimulus measures are also buoying bullish oil prices.

Democrat lawmakers in the US Senate started debating the inclusion of a COVID-19 relief pack in its fiscal 2021 budget resolution.

This is the first step towards passing the $1.9 trillion stimulus package pledged by US President Joe Biden.

Oil Prices Fell as OPEC+ Fail to Agree on Production Level

Brent Price Hits $57.84 as OPEC+ Maintains Reduced Output Policy