Oil Prices climb as OPEC Maintains Production Cuts

The price of oil kept rising, hitting a five-month high of around $90 per barrel. WTI and Brent crude are both up 0.24%. As of this writing, Brent crude is trading at $89.085 per barrel, while US crude is trading at $85.053 per barrel, up. This rise comes after OPEC and its allies (OPEC+) decided to keep the output curbs in place.

The ministers of OPEC+ opted without altering the current output reductions during their virtual conference. This implies that until June, there will be about 2 million fewer barrels of oil produced every day.

US Inventory Surprise:

Official data from the United States showed a slight increase in crude oil stockpiles last week, defying industry predictions of a fall. Petrol inventories did, however, indicate a decline.

Beyond current pricing, indications point to optimism in the oil market. With a shift in focus from safeguarding against price reductions (which are frequent for producers) to possible price increases, options traders are hedging against price hikes more and more. This is consistent with the current structure of the market, which favours higher pricing.

Supply Factors Push Prices Up:

This year has seen an increase in oil prices due to a number of causes. These include the war in Ukraine, Middle East tensions, production cuts by OPEC+, and other supply-side problems like the recent export embargo imposed by Mexico.

Consumer Concerns:

Major oil customers, including India, are becoming concerned about the sudden spike in prices. There, officials have shown concern and alluded to possible measures in the event that excessive costs continue.