The oil market continues to rise

The price of oil continues to rise on Tuesday after the highest jump in a year following the results of the previous session. Yesterday, after the announcement of the results of the OPEC+ meeting, at which it was decided to further reduce production, Brent quotes jumped from the level of $79.70 to $84.70 per barrel. The current quote of the asset is $86.44 per barrel. WTI oil is trading at $81.30. 

The rise in the value of Brent on Monday was the highest since March 21, 2022, WTI – since April 12 last year.

It is worth noting that according to the results of yesterday, the cost of Russian oil changed in the same way as the quotes of the WTI dated grade, respectively, the discounts practically did not change. In particular, the cost of Urals NWE CIF Rotterdam increased by $6.6 per barrel and amounted to $56.65/b (the discount to Brent decreased by $0.06/b to $28.68/b). Urals Med Aframax CIF Augusta yesterday rose by $6.54 per barrel to $59.7 (the discount decreased by $0.12/b and amounted to $25.63/b).

Recall that last night 9 out of 20 OPEC+ countries announced a voluntary reduction in production from May to the end of the year. Earlier, the alliance has already committed to reduce production by 2 million b/d in total by the level of August 2022. The additional reduction will amount to a total of 1.66 million b/d.

Analysts note that this unexpected decision led to a revision of forecasts for oil prices by a number of experts and caused a new wave of concerns about inflation. For example, Goldman Sachs raised the forecast of Brent oil prices for December 2023 to $95 from $90, for December 2024 – to $100 from $95 per barrel. Rystad Energy experts suggest that in the summer of this year, the price of Brent may rise to around $110 per barrel.