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Oil prices have risen 2% after the main group of producers decided to continue with some production cuts to support prices, which were badly affected by the Covid-19 pandemic.
However, the amount of production cuts agreed by the group falls short of analysts’ expectations.
Brent crude futures rose $ 1.04 to $ 49.75 a barrel, while US West Texas Intermediate (WTI) crude futures rose $ 0.84 to $ 46.48 a barrel, Reuters reported. .
On December 3, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known collectively as OPEC +, agreed to ease production cuts starting in January by 500,000 bpd.
Following news of OPEC’s decision, Goldman Sachs stated: “OPEC + overcoming the hurdle of exiting its current cuts in a coordinated manner … reinforces our conviction in a steady and sustainable rebound in oil prices through 2021 “.
Starting next month, OPEC + will reduce the production cut to 7.2 Mbpd from current levels of 7.7 Mbpd.
In a press release, OPEC said: “In light of current oil market fundamentals and prospects for 2021, the meeting agreed to reconfirm the existing commitment under the DoC decision of April 12, 2020, then modified in June and September 2020, to gradually return 2Mbpd, considering market conditions. ”
Meanwhile, a $ 908 billion bipartisan Covid-19 humanitarian aid plan received support from the US Congress, which contributed to oil prices.
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