Oil ticks higher from 5-month low after Russia hints at deepening OPEC+ output cuts; Brent at $78/bbl
Oil prices ticked higher after falling to five-month lows on Tuesday, December 5, after Russia said that the Organisation of Petroleum Exporting Countries and its allies (OPEC+) was ready to deepen output cuts in the first quarter of next year. Russian Deputy Prime Minister Alexander Novak said that OPEC+ could take additional steps to eliminate ‘speculation and volatility’ if existing actions to cut production were not enough.
Brent crude futures rose by 71 cents, or 0.9 per cent, to $78.74 a barrel. US West Texas Intermediate crude futures climbed 69 cents, or 0.9 per cent, to $73.73, according to news agency Reuters. Oil prices had fallen on Monday on doubts that existing OPEC+ cuts would have a significant impact.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a December 18 expiry, was last trading lower by 0.13 per cent at ₹6,149 per bbl, having swung between ₹6,044 and ₹6,193 per bbl during the session so far, against a previous close of ₹6,157 per barrel.
What’s driving crude oil prices?
-OPEC+ agreed on Thursday to output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024. At least 1.3 million bpd of those cuts were an extension of voluntary curbs Saudi Arabia and Russia already had in place.
-The additional cuts announced on Thursday were below the 1 million bpd reduction that the market expected, and OPEC+ was only likely to deliver cuts in practice closer to 500,000 bpd compared to the fourth quarter.
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Updated: 05 Dec 2023, 09:39 PM IST
