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Global crude oil prices traded higher on Thursday, fuelled by ongoing supply concerns amid speculation that OPEC and its allies, including Russia, will maintain oil production cuts until a crucial meeting in June.
At 1:10 pm, the May contract of Brent on the Intercontinental Exchange traded 0.4% higher at $86.43 a barrel, while West Texas Intermediate (WTI) futures rose 0.52% to $81.77 a barrel.
The outlook for the oil markets remains tight as the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia have kept production curbs in place.
Earlier this month, OPEC had agreed to extend output cuts of about 2.2 million bpd to the end of June, contributing to the high global oil prices.
Investors are keenly awaiting the joint ministerial monitoring committee’s meeting on 3 April. However, reports suggest that OPEC+ may not alter output cuts until the full-fledged ministerial meeting scheduled for June.
Adding to the upward pressure on prices, Russia had announced earlier in the month plans to further reduce its oil production. This comes in the wake of attacks on Russian oil refineries by Ukraine, exacerbating the supply situation.
“Oil climbed above $86/bbl to head for a solid quarterly gain on expectations OPEC supply cuts would tighten the global market,” said Vikas Jain, senior research analyst at Reliance Securities.
Thursday’s price increase comes after two consecutive sessions of declines following an unexpected build-up in US inventories.
Meanwhile, the price of India’s crude basket stood at $85.17 per barrel on 27 March, against the average price of $81.62 per barrel in February. It represents a derived basket comprising of Sour grade (Oman & Dubai average) and Sweet grade (Brent Dated) of crude oil processed in Indian refineries.
A report by ICICI Bank Research said that the upside bias in the oil market is largely a result of the geopolitical conflicts and the trend is likely to continue in the near term.
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Published: 28 Mar 2024, 01:57 PM IST
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