Brent Crude, the global benchmark oil price, circled $84 a barrel today after the oil exporters’ cartel agreed to extend the lifetime of its current production cuts.
The 2.2 million barrels a day reduction will now run until June, a further three months, having originally been scheduled to finish at the end of this month.
Brent was trading at $83.78 in the European afternoon into the start of US trading, up 0.3% on the session.
The commodity added about 5% last week in the run up to the decision, which was widely expected.
Over the past two weeks, the oil markets have witnessed a notable resurgence, driven by factors bolstering investor confidence.
The main driving force behind this phenomenon has been optimism surrounding a tighter supply in the oil market for this year and the prospect of an eventual interest rate cut in the United States.
On Monday, oil prices received an additional boost after the members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) agreed to extend voluntary oil production cuts by 2.2 million barrels per day until the second quarter.
This decision, widely anticipated by the market, was met with enthusiasm as production cuts are expected to help stabilize the market amidst growing global economic concerns and increased production outside the group.
A notable announcement in this regard came from Russia, which pledged to reduce its oil production and exports by over 450,000 barrels per day during the second quarter, further in coordination with some OPEC+ participating countries. This move surprised some analysts and has been perceived as a significant step towards rebalancing the oil market and restoring price stability.
