Oil Hits Three-Year High After OPEC+ Sticks To Output Plan

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  • oil hits multi-year highs as OPEC+ sticks to output plan
  • OPEC+ agreed to adhere to its July pact to boost output by 400,000 barrels per day (bpd) each month
  • U.S. West Texas Intermediate (WTI) oil closed up $1.31, or 1.7%, at $78.93 a barrel
  • rocketing global natural gas prices may incentivize some power generators to switch from gas to oil
  • crude prices are likely to remain supported even though there could be a short-term pullback

Oil prices jumped on Tuesday, with U.S. crude hitting its highest since 2014 and Brent futures climbing to a three-year high, after the OPEC+ group of producers stuck to its planned output increase rather than raising it further says an article on Reuters.

OPEC+ to adhere to its July pact

On Monday, OPEC+ agreed to adhere to its July pact to boost output by 400,000 barrels per day (bpd) each month until at least April 2022, phasing out 5.8 million bpd of existing production cuts.

Contracts extended gains

U.S. West Texas Intermediate (WTI) oil closed up $1.31, or 1.7%, at $78.93 a barrel. During the session, it surged more than 2% to as high as $79.48, the most in nearly seven years. Brent crude settled up $1.30, or 1.6%, at $82.56. Earlier, Brent hit a three-year high of $83.13.

Global natural gas prices

Rocketing global natural gas prices, which may incentivize some power generators to switch from gas to oil, mean crude prices are likely to remain supported even though there could be a short-term pullback, said Gary Cunningham, director of market research at Tradition Energy.

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