WTI shoots to fresh 13-month highs as OPEC+ and the Saudis opt not to hike oil output

• WTI has flown higher to hit fresh cycle highs above $64.00 in recent trade amid bullish OPEC+ headlines.
• The cartel is reportedly close to agreeing to leave output unchanged in April.
• Moreover, the Saudis are mulling rolling over their 1M barrel per day voluntary cuts to May.

Crude oil markets have flown back to cycle highs in recent trade amid bullish OPEC+ headlines. Essentially, it looks as though the cartel is not going to be increasing output after all, in stark contrast to expectations heading into Thursday’s meeting.

As a result, West Texas Intermediary (or WTI) has rocketed higher, hitting fresh 13-month highs at just below the $64.50 level, up over 4.5% or about $2.80 on the day and a stunning recovery from earlier weekly lows around $59.20. Brent is also up by over 4.5% or about $3.00 on the day and is also trading at 13-month highs at $67.00.

OPEC+ Update

According to multiple sources, OPEC+ is close to an agreement that would keep output quotas unchanged in April. Separate reports suggest that quotas may also be rolled over in May, although sources are now saying that May production levels are set to be decided when the cartel meets in April.

Russia is said to be making the case for increasing supply, given concerns about US shale. Khazakstan is said to support the Russian viewpoint. However, Russia’s tone on the release of more oil supply is dovish; according to sources cited by newswires, Russia has informed OPEC+ that it is important to be careful when increasing supply so as not to “destroy” the market’s balance, which means a very gradual release of supply needs to occur on a “step-by-step” basis.

Elsewhere, multiple sources are reporting that the Saudi Arabians are mulling rolling over their 1M barrel per day in additional (and voluntary) output cuts into at least April and maybe even May, though some reports suggest this would be on condition that “compensation” cuts from other countries that overproduced last year must be adhered to. Separate recently release reports suggest Saudi Arabia might gradually bring its 1M supply cut back online starting in May.