ISLAMABAD
Crude oil prices remained on upward trajectory for the third straight session on Monday after OPEC+ extended the cuts into 2024 and Saudi Arabia announced an additional reduction of 1 million bpd for July.
As of 1310 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.18 (+1.55 percent) to reach $77.31. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $1.13 (+1.58 percent) to $72.87.
The price of Russian Sokol increased by $1.93 (+3.02 percent) to $65.80. Arab Light prices witnessed an increase of $2.19 (+2.88 percent) to reach $78.19 a barrel.
The price for Opec Basket decreased by $0.28 (-0.38 percent) to $72.79. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Oil prices are now a lot more likely to rise, Fatih Birol, the Executive Director of the International Energy Agency (IEA), was quoted as saying on Monday. Expectations already were that there would be an imbalance in the oil market in the second half of the year; now the supply-demand gap will worsen, he added.
On Sunday, the OPEC+ producers decided to keep the current cuts until the end of 2024, while OPEC’s top producer and the world’s largest crude oil exporter, Saudi Arabia, said it would voluntarily reduce its production by 1 million bpd in July, to around 9 million bpd.
The IEA has been warning this year that supply cuts risk increasing oil and energy prices at a time of heightened uncertainty.
After the surprise OPEC+ cuts announced in early April, the IEA said in its Oil Market Report for the month that the “surprise OPEC+ supply cuts announced on 2 April risk aggravating an expected oil supply deficit in 2H23 and boosting oil prices at a time of heightened economic uncertainty, even as industrial activity slows in the world’s largest economies and production growth outside the alliance appears robust.”
