OPEC+ agrees to cut production by further 500K barrels, WTI hits monthly highs
- Crude oil hits fresh monthly highs but then trimmed gains after the OPEC+ meeting.
- OPEC+ decided to deepen cut by 500K b/d, for a total adjustment of 1.7 million b/d.
WTI futures jumped toward $59.090 after the Organization of the Petroleum Exporting Countries and its allies's meeting ended. Crude reached the highest level in two months an then pulled back. As of writing, trades at $58.70 up 0.55% for the day.
OPEC cut, oil rises
At the press conference, following the meeting, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman announced oil producers agreed to extend production cuts by an additional 500K barrels per day (b/d) through to March of next year when the next meeting will take place.
The agreement is larger than what it was initially expected (400K b/d). Over the last few days, crude oil rose constantly on the back of speculations about a larger cut. WTI is trading above November highs and a consolidation could point to further gains over the next days, including a test of $60.00.
The outcomes of the meeting triggered only a modest rally but helped WTI held to weekly gains. The total cut in output will total 1.7 million b/d. Abdulaziz bin Salman explained Saudi Arabia will continue with its additional voluntary contribution leading the adjustment to 2.1 million barrels. Regarding the Saudi Aramco IPO, the Minister said he is convinced the company will be worth more than two trillion dollars in a few months.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
