OPEC+ Decision to Extend Supply Cuts Keeps WTI Crude Oil Bullish
Arslan Butt • 1 min read
WTI crude oil prices are climbing higher on Friday as markets cheer OPEC+’s decision to hold off on raising supply next month in wait of more clarity around the possibility of recovery in both the global economy and oil demand. At the time of writing, WTI crude oil is trading at around $64.44 per barrel.
During the previous session, crude oil prices soared by over 4% on the optimism after OPEC and its allies announced continuation of existing supply curbs into the month of April as well. Prior to the meeting, for several sessions, oil had been trading bearish as markets anticipated that the group could increase production as economies begin to recover from the pandemic as the COVID-19 vaccine rollouts gather steam.
In addition to the group maintaining existing levels of production, oil prices received an additional boost by Saudi Arabia’s announcement of extending the extra 1 million bpd cuts into April as well. The de facto leader of the group had previously implemented the deeper curbs for two months, February and March.
The decision reflects the cautious mood surrounding the pandemic, despite the vaccine optimism. The discovery of new strains of the virus is holding back the mood from turning too upbeat, and has also driven leading oil supplying nations to hold back on raising crude production until there is greater certainty that there will be no more need for lockdowns and restrictions around the world.