By Barani Krishnan
Investing.com - Oil prices continued their upward march on Monday to the drumbeat of OPEC and its allies, who indicated they were in no mood to let the market slide by adding any more barrels than the 400,000 per day they had agreed to in the near future.
“The group is clearly perfectly happy with (existing) price levels,” Craig Erlam, analyst at online trading group OANDA, said as crude prices hovered around $85 per barrel, almost double from where they traded a year ago. “This is clearly a very bullish market.”
U.S. West Texas Intermediate crude settled up 46 cents, or 0.6%, at $84.05 per barrel.
London-traded Brent, the global benchmark for oil, finished the session at $84.71, up 33 cents or 0.4%.
Crude prices initially fell on Monday on release of strategic stockpiles by China to cool domestic energy prices.
But by the close of the session in New York, they were back higher, following the rhythm of most of the 13-member countries and allies in the Organization of the Petroleum Exporting Countries that there should be no production hike than pre-agreed levels.
OPEC+ holds its regular monthly meeting on Thursday.
While earlier in the year, the OPEC+ meetings served to really address supply-demand issues in the market, the past few have been little more than an opportunity for the cartel to talk up crude prices by stating what traders already knew would be its response to producing countries' demands for more barrels: No.
Thursday’s meeting will likely be as "swift and consistent with the last," said Erlam, adding that he expected world leaders to again be “disappointed with the worsening oil market deficit". Energy experts say the total addition of 2 million barrels planned by OPEC between November and April is akin to a drop in the bucket for a market needing at least a million barrels more each month.
Crude prices got a boost on Monday for another reason: Bank Of America’s call that $120 a barrel might be possible by June 2022.