Crude Oil Prices Remain Steady ahead of OPEC+ Meeting

Crude Oil Prices Remain Steady ahead of OPEC+ Meeting

Crude oil prices remain steady on Monday ahead of a scheduled meeting by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) to discuss plans to ease supply cut. This is coming as investors maintain consciousness over extra Iranian barrels flooding the market as a result of the ongoing nuclear talks.

Oil has stayed behind $70 per barrel for months, though Goldman Sachs predicted that prices will hit $80 per barrel in 2021 in spite of OPEC+ position to incremental increase output in the market. Iran authority indicated that United Nations sanctions over its exports and economic activities will be lifted amidst nuclear deal discussion.

International benchmark Brent crude was trading at $69.13 per barrel, increased by 0.71% from Friday close at $69.63 a barrel. American benchmark West Texas Intermediate (WTI) was trading at $66.84 a barrel at the same time with a 0.78% increase after ending the previous session at $66.32 per barrel.

Crude Oil Prices Remain Steady ahead of OPEC+ Meeting
Crude Oil Prices Remain Steady ahead of OPEC+ Meeting

Last week’s optimistic projections by both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) over a quicker fuel demand recovery supported higher prices.

The energy agency forecasted a surge in oil demand by 6% in 2021, particularly in the second half of the year.

However, the recent negotiations between the US and Iran to revive the 2015 nuclear agreement and lift Iranian oil export sanctions are heightening investor caution over the extra barrels that Iran will bring to the market.

The Organization of the Petroleum Exporting Countries and allies including Russia will meet on Tuesday. Basically, the OPEC+ focus will centre on output quotas and on whether they will continue to gradually ramp up production.

The OPEC+ group had agreed to an incremental production increase of 350,000 barrels per day (bpd) for May and June, and about 400,000 bpd for July in their meeting on April 1.

On April 27, OPEC+ agreed to continue their output adjustment decision given the continuing recovery in the global economy. Brent oil increased by more than 3% last week as global oil demand rebounds and a more-than-expected fall in US crude inventories.

However, prices continue their upward trend as many analysts agree that “the expected global demand recovery this summer seems strong enough to absorb the effect.”

Taking into account US transportation fuel data and the acceleration in vaccination programs in many regions, OPEC and the IEA foresee that oil demand will surge by 6% in 2021, particularly in the second half of the year.

Crude Oil Prices Remain Steady ahead of OPEC+ Meeting