By Dhirendra Tripathi
Investing.com – Crude oil prices hit their highest levels in nearly three years on Thursday, after newswire reports suggested that the the OPEC+ group of producers is working on a plan that would see their output raised by less than currently expected.
Reuters reported that Saudi Arabia, OPEC's largest producer, and Russia are working on a proposal to raise the group's output by 400,000 barrels a day from August, and by the same amount every month through the end of this year. That would lifting output by 2 million barrels a day from current levels as of the beginning of December.
Brent Brent Oil Futures crude gained 2% to $76.14 a barrel by 0700 ET. U.S. West Texas Intermediate Crude Oil WTI Futures crude was up 2.6% at $75.42.
WTI rose more than 10% in June while Brent added more than 8%, touching their highest levels since October 2018.
Ministers from OPEC and its allies have already kicked off a series of meetings to decide on output policy. Reuters reported the group may consider extending its overall supply pact beyond April 2022.
"Given the sharp demand increase we expect for this summer, we think the group will modestly increase production. Even so, the oil market will remain undersupplied," UBS analyst Giovanni Staunovo told Reuters, predicting that larger oil inventory declines will lift prices higher in the third quarter.
The global economy, while booming in places, is still grappling with the emerging variants of the coronavirus. Indonesia, Bangladesh, countries in Europe, Africa and Latin America are battling another wave of the deadly virus that threatens to inhibit the process of normalizing economic life.