Oil prices surge as analysts predict OPEC+ will maintain production cuts

Crude oil prices rose earlier today ahead of the OPEC+ meeting scheduled for Sunday. Most analysts anticipate that the group will maintain production cuts of approximately 2.2 million barrels per day throughout the second half of the year.

Brent crude surpassed $84 per barrel earlier, while West Texas Intermediate gained over $1 to exceed $80 per barrel. Analysts suggest that OPEC+’s ongoing production control will help stabilise a market that appears to be oversupplied.

Sugandha Sachdeva from India-based consultancy SS WealthStreet told Reuters, “Furthermore, the onset of the summer driving season in the U.S. spurs a seasonal uptick in consumption and typically aids a positive momentum in crude oil prices.”

Early travel data for Memorial Day weekend indicate a bullish outlook for prices. ANZ analysts noted, “Initial data suggest a relatively high number of U.S. holiday trips have been taken over the Memorial Day holiday, the traditional start of the driving season. Air travel has also been strong,” as quoted by Reuters.

In other developments, Warren Patterson and Ewa Manthey from ING highlighted a production outage at the Buzzard field in the UK’s North Sea, reported by operator CNOOC this week. The Buzzard field, the largest source of Forties crude in the Brent crude benchmark, has a production capacity of 80,000 barrels per day.

Regarding the upcoming OPEC+ meeting, Patterson and Manthey wrote, “Members are expected to fully roll over their additional voluntary cuts. High expectations of a full rollover mean that OPEC+ needs to ensure it does not disappoint the market, otherwise, it risks an aggressive pullback in prices.”

Additional factors contributing to the rise in oil prices include reports of a Houthi attack on a ship in the Red Sea and the ongoing Israel-Hamas conflict.

Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Challenger Energy

More articles like this

Challenger Energy

Oil prices rise due to summer demand and OPEC+ cuts

Oil prices rose on Monday, driven by forecasts of a supply deficit from peak summer fuel consumption and OPEC+ cuts, despite global economic challenges and increased non-OPEC+ output. Brent crude futures reached $85.53 a barrel, while

Challenger Energy

Oil prices set for third consecutive weekly increase

Oil prices experienced a rise during Asian trade on Friday, positioning themselves for a third consecutive weekly increase. This uptrend is supported by growing expectations that the U.S. central bank will soon begin to cut interest

Challenger Energy

Crude oil prices set to rise amid improving demand

Crude oil futures saw little change on Friday but were poised to increase for a second consecutive week, driven by signs of rising demand and declining oil and fuel inventories in the United States, the world’s

Challenger Energy

Optimism drives oil prices to a one-month high

On Monday, oil prices experienced a significant surge, reaching their highest settlement levels in over a month. This increase, which added to the previous week’s gains, was driven by investor optimism regarding future demand. U.S. West