WTI advances to near $83.10 due to expected supply constraints stemming from OPEC+ cuts

West Texas Intermediate (WTI) oil price is on an upward trajectory for the third successive session, with the commodity trading around $83.10 per barrel during Asian trading hours on Monday. The sustained increase in Crude oil prices is attributed to anticipated supply constraints stemming from production cuts by the Organization of the Petroleum Exporting Countries and their allies (OPEC+).

Investors are eagerly awaiting the OPEC+’s joint ministerial meeting scheduled for this week. It is anticipated that during the meeting, OPEC+ will assess market fundamentals and members' adherence to production targets, with widespread expectations for the retention of current output policies.

Furthermore, Russian Deputy Prime Minister Alexander Novak emphasized on Friday that oil companies should prioritize reducing output over exports in the second quarter to align with OPEC+ production targets. He also stated that there is no necessity for Russia to impose export bans on diesel to address escalating prices and potential fuel shortages following drone attacks that disrupted refining capacity.

Ukrainian drone strikes have crippled numerous Russian refineries, leading to a decline in Russia's fuel exports. These attacks have rendered nearly 1 million barrels per day of Russian Crude processing capacity inactive.

Official data revealed that Chinese manufacturing activity witnessed its first expansion in six months in March, enhancing the outlook for Crude oil demand in the world’s leading Crude importer. Analysts at Goldman Sachs noted that oil demand in Europe exceeded expectations, with a year-on-year increase of 100,000 barrels per day (bpd) recorded in February, contrasting with their earlier projection of a 200,000 bpd decline for 2024.