Brent futures rose by 14 cents to reach $83.69 per barrel, while U.S. WTI saw a slight increase of 2 cents, reaching $79.99 per barrel
Oil prices increased slightly on Monday following the decision by OPEC+ members to prolong voluntary oil production cuts until the end of the second quarter.
Russia also committed to reducing production and exports.
At 0415 GMT, Brent futures rose by 14 cents to reach $83.69 per barrel, while U.S. West Texas Intermediate (WTI) saw a slight increase of 2 cents, reaching $79.99 per barrel.
Signs of tightness in the physical market continue to push crude oil higher. Output reductions by the OPEC+ alliance continue to cut supply as the market worries about the renewed tensions in the Middle East, ANZ analysts said in a note on Monday.
OPEC+ members will continue with their voluntary oil production cuts of 2.2 million barrels per day through the second quarter, aiming to provide support to the market amidst global economic uncertainties and increased output from non-member countries. Russia’s commitment to further reduce oil output and exports by 471,000 barrels per day in the upcoming quarter, in collaboration with select OPEC+ countries, came as a surprise to some analysts.
The OPEC+ cuts would lead to a lower production from the group at 34.6 million bpd in the second quarter against an earlier forecast that output could rise above 36 million bpd in May as producers unwind supply cuts, Jorge Leon, a senior vice president at consultancy Rystad Energy said in a note.
This new move by OPEC+ clearly shows strong unity within the group, something that was put into question after the November ministerial meeting, which saw Angola leaving OPEC, he said.
He added: It also shows robust determination to defend a price floor above $80 per barrel in the second quarter.
