Oil Prices Escalate in Response To Supply Cuts

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  • Front-month Brent crude futures rose to $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel. 
  • U.S. crude futures for August climbed $1.52, or 2.6%, to $59.99 a barrel, after hitting highest at $60.13. 
  • OPEC and allies pushing to extend supply cuts until the end of 2019 at their Vienna meeting. 
  • Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.

Front-month Brent crude futures touched an intraday high of $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel by 0639 GMT, reports Freight Investor Services.

The Front-month Brent crude futures were with respect to the month of September. 

U.S. crude futures

Also, U.S. crude futures for August climbed $1.52, or 2.6%, to $59.99 a barrel, after earlier hitting their highest in over five weeks at $60.13.

OPEC and allies 

The reason behind this rise happens to be OPEC and its allies. 

They are pushing to extend supply cuts until at least the end of 2019 at their meeting in Vienna later this week.

Increase in the existing output cuts

As per the request of OPEC, they have even figured out to get Russia to concur with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.

No change in the status quo

This being not the biggest surprise in the world, it would be interesting to see how the market will react to such news. 

The decision is more of a non-news event which doesn’t change the status quo, and doesn’t deal with any of the problems in the market.

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Source: FIS

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