SULAIMANI (ESTA) — Oil prices climbed on Tuesday, hitting their highest levels in at least three years, after the world’s oil producers announced they had decided to keep a cap on crude supplies.
Brent crude futures were up by 21 cents at $81.46 by 0552 GMT, having risen 2.5% on Monday.
U.S. West Texas Intermediate (WTI) oil rose 16 cents to $77.78, after gaining 2.3% the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, collectively known as OPEC+, said on Monday it would maintain an agreement to increase oil production only gradually.
Oil prices have already surged more than 50% this year, a rise that has added to inflationary pressures that crude-consuming nations are concerned will derail recovery from the pandemic.
Reuters cited a source as saying that OPEC+ was concerned that a fourth global wave of coronavirus infections could hit the demand recovery.
“We expect a gradual normalization in demand growth and a rebound in supply will start to weigh on oil prices from the fourth quarter,” Capital Economics said, according to Reuters.
“This year, growth in demand has outpaced supply, helping prices to hit multi-year highs, but we expect this dynamic to reverse as OPEC+ ramps up production,” Capital added.
