Oil prices rose on early Monday trading following the announcement of an extension of voluntary production cuts by OPEC+ nations.
The group, led by Saudi Arabia and comprised of the UAE, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, was due to increase output by 180,000 barrels per day (bpd) in December, a move originally intended to take place in October due to weaker demand.
However, the organisation has now agreed to extend its 2.2 million bpd cuts until December.
As a result of the announcement, Brent crude increased by $1.18, or 1.61%, reaching $74.28 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose by $1.20, or 1.73%, to $70.69.
ING analysts noted that the delay doesn’t drastically alter fundamentals, although it could suggest OPEC+ might be more committed to supporting prices than anticipated.
Last week, Brent and WTI faced declines of about 4% and 3%, respectively, largely due to record US output. Both contracts saw slight increases on Friday due to geopolitical concerns, speculation over interest rate cuts and uncertainty regarding the US election.
