London: Brent crude oil futures rose to a three-year high on Tuesday, with US benchmark crude nearing a 2014 peak, with the OPEC+ group of producers deciding to pump in even more rather than increase their planned output.
OPEC+ in July agreed to end 5.8 million bpd of existing production cuts to boost production by 400,000 barrels per day (bpd) every month until at least April 2022.
Brent crude was up $1.07, or 1.3%, at $82.33 a barrel by 1128 GMT, having risen 2.5% on Monday. US West Texas Intermediate (WTI) oil rose 89 cents, or 1.2%, to $78.51 after gaining 2.3% in the previous session.
Oil prices have already risen more than 50% this year, a rise that has added to the inflationary pressure that crude-consuming countries such as the United States and India are concerned about as the pandemic rages on.
The OPEC+ Joint Technical Committee (JTC) said late last month that it expected a supply deficit of 1.1 million bpd this year to expand to 1.4 million bpd next year.
Despite pressure to increase output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could affect the recovery in demand, a source told Reuters shortly before the vote.
Russian Deputy Prime Minister Alexander Novak said after the talks that he believes the market is now balanced.
“The (price) move looks a bit big,” Barclays said, as ministers ratified the decision announced in July, but it shows how tight the market is, with risks at these inventory levels in our view of asymmetric price action. strengthens,” Barclays said. in a note.
Meanwhile, US crude and distillate inventories are likely to decline last week, according to a preliminary Reuters poll.
Five analysts surveyed by Reuters estimated an average of about 300,000 barrels in crude inventories in the week to October 1.
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