Connect with us

Hi, what are you looking for?

Commodities & Futures

Crude Oil Surges After OPEC Decision; Rig Count Eyed

Commodities31 minutes ago (Mar 05, 2021 10:00AM ET)

(C) Reuters.

By Peter Nurse — Crude oil prices surged Friday, climbing to fresh one-year highs, after a group of top producers agreed not to increase supply in April, taking a cautious stance on the global economic recovery.

By 10 AM ET (1500 GMT), U.S. crude futures traded 3% higher at $65.77 a barrel, rising above $65 for the first time since January 2020, while the international benchmark Brent contract rose 3.2% to $68.90, also at its highest level since the start of last year.

U.S. Gasoline RBOB Futures were up 2.5% at $2.0484 a gallon, the first time above $2 since January 2019.

These gains followed the decision of the Organization of Petroleum Exporting Countries and its allies including Russia, a grouping known as OPEC+, to extend its output curbs into April, only granting small exemptions to Russia and Kazakhstan.

This move surprised a number of traders, particularly with Saudi Arabia agreeing to maintain its voluntary additional cut of 1 million barrels per day through April even after oil prices had rallied to over $60 a barrel from below $40, when it decided on the need to reduce global supply.

Analysts at influential investment bank Goldman Sachs (NYSE:GS) responded to this decision by lifting its second-quarter and third-quarter forecasts for Brent by $5 each to $75 and $80 a barrel, respectively.

“Although members discussed Covid demand risks, our takeaway from the press conference is that the discipline of shale producers is likely behind this slower increase in production,” the bank said in a note.

The OPEC+ members appear to believe that U.S. oil production will struggle to respond to the higher price environment in the near term, particularly after the damage caused by the recent wintry snap.

“If this is the attitude that OPEC+ are taking it does suggest that they believe they can push prices even higher, without the risk of losing market share,” said analysts at ING, in a research note. “And would not be surprised to see Brent testing US$70/bbl ahead of the next OPEC+ meeting” at the start of April.

Ahead of that, focus will turn to the Baker Hughes’ rig count data later Friday. The number of active rigs has picked up somewhat in recent months but remains nowhere near the level analysts say is necessary to generate a meaningful rise in output.

Crude Oil Surges After OPEC Decision; Rig Count Eyed

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.


Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.


Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved