Oil prices rose during the final trading session of the week on Friday, February 2, 2024, after the OPEC+ group decided to keep its voluntary oil production cut policy unchanged at a meeting of the Joint Ministerial Monitoring Committee (JMMC) held on Thursday.
Brent crude futures for April delivery gained 0.31% to $78.94 per barrel by 9:00 AM Mecca time. US West Texas Intermediate (WTI) crude futures for March delivery increased 0.23% to $73.99 per barrel.
This rise came after oil prices fell by more than 2% in the previous session, with US crude down 2.7% to $73.82 per barrel and Brent down 2.3% to $78.70 per barrel.
OPEC and its allies, known as OPEC+, reaffirmed their commitment to the current production policy in a statement issued on Thursday. The statement highlighted the high compliance of participating countries with the agreed production cuts.
OPEC+ sources told agencies on Thursday that the group will decide in March whether to extend the voluntary production cuts implemented in the first quarter.
OPEC+ is currently cutting production by 2.2 million barrels per day (bpd), in line with the decision made in November.
Analysts at ANZ Research noted that these cuts will keep supply tight in the first quarter, with non-OPEC production growth expected to normalize and US output growth slowing in 2024 to 300,000 bpd from 800,000 bpd last year.
The rise in oil prices can be attributed to various factors. Geopolitical tensions in the Middle East, particularly the escalating conflict between Israel and Hamas, are causing concerns about the oil supply. Additionally, the ongoing economic recovery from the COVID-19 pandemic is contributing to an increased demand for oil. These factors are expected to sustain elevated oil prices in the near future.
