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Oil settles above $81 with OPEC+ sticking to output increase

CommoditiesOct 04, 2021 03:51PM ET
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© Reuters. FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base

By Laura Sanicola

(Reuters) -Oil jumped to a three-year peak on Monday after OPEC+ confirmed it would stick to its current output policy as demand for petroleum products rebounds, despite pressure from some countries for a bigger boost to production.

The producer club's decision to keep increasing oil output gradually sent prices sharply higher, adding to inflationary pressures that consuming nations fear will derail an economic recovery from the pandemic.

OPEC+ agreed in July to boost output by 400,000 barrels per day (bpd) each month until at least April 2022 to phase out 5.8 million bpd of existing production cuts.

Brent crude settled up $1.98, or 2.5%, to $81.26 a barrel. It rose 1.5% last week for a fourth consecutive weekly gain, and was back up to highs last seen in 2018.

U.S. oil (CLc1) settled up $1.74, or 2.3%, to $77.62 a barrel after gaining for the past six weeks, and was at its highest since 2014.

"Given the demand picture and the outcome of the OPEC meeting, the overall sentiment around crude is bullish," said John Kilduff, partner at Again Capital LLC in New York.

Demand for coal and natural gas has exceeded pre-COVID-19 highs with oil closely trailing, according to energy watchdog, the International Energy Agency. Three-quarters of global energy demand is still met by fossil fuels, with less than a fifth by non-nuclear renewables.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, has faced pressure from some countries to add back more barrels to the market as demand has recovered faster than expected in some parts of the world.

Four OPEC+ sources told Reuters recently that producers were considering boosting output by more than had already been agreed.

The oil price rally has also been fuelled by an even bigger increase in gas prices https://www.reuters.com/business/energy/whats-behind-wild-surges-global-lng-prices-risks-ahead-2021-10-01, which have spiked by 300%, prompting switching to fuel oil and other crude products to generate electricity and for other industrial needs.

Oil settles above $81 with OPEC+ sticking to output increase
 

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Comments (6)
Subodh Kumar
Subodh Kumar Oct 05, 2021 6:16AM ET
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Todd Gray
Todd Gray Oct 04, 2021 4:21PM ET
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biden really is a betrayer of his own people. all over some global agenda, that's brought nothing more than chaos to this country, and most of the world. it doesn't affect him, and he doesn't really care how it affects us.
Rod Deh
Rod Deh Oct 04, 2021 4:21PM ET
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well Biden didn't have a single thing to do with current levels ... he just stopped future expansion.... this is a result of something else
Subodh Kumar
Subodh Kumar Oct 04, 2021 4:21PM ET
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DJ Ryte
DJ Ryte Oct 04, 2021 1:42PM ET
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Benedict Biden's climate change scheme. Inflate oil price & make USA dependent on globalist
Subodh Kumar
Subodh Kumar Oct 04, 2021 1:42PM ET
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yes ok
john dislias
john dislias Oct 04, 2021 1:28PM ET
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They are crazy
Subodh Kumar
Subodh Kumar Oct 04, 2021 1:28PM ET
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yas sar
Vlad Lozovskiy
Vlad Lozovskiy Oct 04, 2021 8:43AM ET
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it is so incredibly steady that is almost at 80$ mark!
Mohammed Bako
Mohammed Bako Oct 04, 2021 1:10AM ET
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Thanks
 
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