Oil hits multi-year high as OPEC+ sticks to output plan

A worker is seen at Iraq’s Majnoon oilfield near Basra, Iraq, March 31, 2021. (Reuters photo)

SULAIMANI (ESTA) — Oil prices rose on Wednesday on supply anxiety, particularly after OPEC+ decided on Monday to stay with their planned output increase rather than boosting it further.

Brent crude settled up $1.30 at $82.56 a barrel at 0604 GMT. On Tuesday, Brent hit a three-year high of $83.13.

U.S. West Texas Intermediate (WTI) oil rose 29 cents to $79.22 per barrel. During the session on Tuesday, it surged more than 2% to as high as $79.48, the most in nearly seven years.

On Monday, the Organization for Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed to adhere to its July pact to boost output by 400,000 barrels per day (bpd) each month until at least April 2022, phasing out 5.8 million bpd of existing production cuts.

“Crude oil extended gains as investors fret about tightness in the market as the energy crisis hikes demand,” Reuters quoted ANZ as saying.

“The [OPEC+] increase was well below what the market was expecting, considering the energy crunch across the globe. Not surprisingly, there is speculation that OPEC will be forced to move before the next scheduled meeting if demand continues to surge.”

Oil prices have surged more than 50% this year, adding to inflationary pressures that crude-consuming nations such as the United States and India are concerned will derail recovery from the COVID-19 pandemic, according to Reuters.

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