Crude Oil Price – Oil prices strengthened in today’s trade as investors bet that at the upcoming OPEC + meeting, the world’s oil producers will largely agree to extend supply restrictions to May 2021.
Wednesday (31/3) at 09:15 WIB, the price of Brent crude oil for the May 2021 delivery contract rose 15 cents or 0.2% to the level of US $ 64.29 per barrel. In the previous session, the price of Brent fell 1.3%.
Likewise, the price of West Texas Intermediate (WTI) crude oil futures for the May 2021 delivery contract jumped 15 cents, or 0.3%, to the US $ 60.70 per barrel, after plunging 1.6% in the previous session.
“The hope is that OPEC + will demonstrate supply discipline, so that is moving the market,” said Commonwealth Bank commodities analyst Vivek Dhar.
As is well known, OPEC + will meet following the weakening of oil prices in the past month due to concerns about the extended pandemic lockdown in Europe, slow vaccine launches, and increasing cases of Covid-19 in India and Brazil. This negative sentiment echoes the growing optimism in growth in the United States.
Last month, OPEC + surprised markets by agreeing to extend supply restrictions, with small exceptions for Russia and Kazakhstan, at a time when demand for fuel appeared to be recovering.
“Given what has happened since then, the reason is especially to increase supply. So we think that discipline will be maintained at the meeting (on April 1), “said Dhar.
Under existing restrictions, OPEC, led by Saudi Arabia, and non-OPEC producers, led by Russia, have cut more than 7 million barrels per day (BPD). On the other hand, Saudi Arabia has made voluntary reductions by an additional 1 million BPD.
Saudi Arabia is poised to support extending supply cuts through June, including voluntary cuts itself, to raise prices, a source described on the matter told Reuters this week.
Adding to the view that OPEC + should hold back on supplies was data from the American Petroleum Institute (API) which showed US crude stockpiles rose by 3.9 million barrels last week.
The realization was well above analyst estimates in a Reuters poll for an increase of 100,000 barrels. The government-issued US inventory data will be out on Wednesday.