Oil Prices Spike Significantly as OPEC+ Keeps Output, Saudi Voluntarily Cuts Production

Oil prices climbed noticeably on Tuesday after major oil producers reached an agreement on output.

The West Texas Intermediate (WTI) for February delivery added 2.31 U.S. dollars or a 4.85% gain to settle at 49.93 dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery increased 2.51 dollars or 4.9% to close at 53.60 dollars a barrel on the London ICE Futures Exchange.

 

Yesterday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, widely known as OPEC+, agreed Tuesday to raise output slightly in February and March. Most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns and two members, Russia and Kazakhstan, will be allowed to boost their output by a modest combined 75,000 barrels per day (bpd) in February and a further 75,000 bpd in March, according to a statement issued by the group at the end of its first ministerial meeting of the year. Meanwhile, Saudi Arabia pledged a voluntary oil production cut of 1 million bpd beyond the required OPEC+ quotas in February and March.

In the December meeting, OPEC+ agreed to increase oil production by 500,000 barrels per day from January, putting its current cuts at 7.2 million bpd.

 

Source: Xinhua