Oil Steadies at $83 as OPEC+ Extends Output Cuts
The global prices of crude oil were little changed on Monday as the Organisation of Petroleum Exporting Countries (OPEC) and its allies members OPEC+) extended oil output cut for the second quarter of the year.
Brent traded little changed at $83.5 per barrel in the morning trading session as OPEC+ members agreed to extend their voluntary 2.2 million barrels per day (mbpd) oil output reduction through the end of June, largely in line with market expectations, ING commodities strategists said in a note.
Saudi Arabia will continue to dominate the pledged output reduction share at 1 mbpd, while Russia promised to focus more on oil output cuts rather than exports. The group further added that “these voluntary cuts will be returned gradually subject to market conditions.”
Meanwhile, preliminary OPEC production numbers for February are starting to come through and suggest that oil output increased slightly as Libya resumes oil production at its biggest field, while some producers pumped more than the agreed oil output cut limits for the month.
According to a Bloomberg survey, OPEC output rose by 0.1 mbpd month-on-month to 26.7 mbpd last month. Libya led the gains with its production rising by 120 mbpd, up by 11.2% month on month to 1.1 mbpd as it resumed its Sahara oil field, which was closed earlier due to protests this year.
This was followed by Nigeria with oil output rising by 2% month on month to 1.52 mbpd. Meanwhile, Iraq and UAE together produced almost 400 mbpd above their agreed oil output limits in February.
Weekly data from Baker Hughes shows that the US oil rigs rose by three rigs over the last week, with the total oil rig count increasing to 506 for the week ending 1 March 2024, the highest rig count since the week ending 22 September 2023.
Gas rigs fell by 1, taking the total rig count (oil & and gas combined) to 629 over the reporting week. The continued volatility in the gas prices appears to weigh on gas rigs with some of the exploration companies reducing investments in natural gas production.
The latest positioning data from CFTC shows that speculators increased their net long positions. The ongoing uncertainty in the Middle East and concerns over tightening supply are currently supporting the uptrend in speculative bets. #Oil Steadies at $83 as OPEC+ Extends
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