TOKYO: Brent oil costs rose on Wednesday to the very best since February after Saudi Arabia agreed to expand cuts in output than anticipated throughout a gathering with allied producers, whereas business information confirmed U.S. crude stockpiles fell final week.
Brent crude rose as a lot as 0.6% to $53.94 a barrel, the very best since Feb. 26, 2020. It was at $53.79 a barrel at 0147 GMT and gained 4.9% on Tuesday.
U.S. West Texas Intermediate (WTI) futures gained 13 cents, or 0.26%, to $50.06 a barrel. The contract on Tuesday closed up 4.6% at $49.93, its highest since Feb. 24, 2020.
Saudi Arabia, the world’s greatest oil exporter, agreed on Tuesday to make further, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March, after a gathering with the Group of the Petroleum Exporting International locations (OPEC) and different main producers that kind the group often called OPEC+.
The reductions agreed by Saudi Arabia had been included in a deal to influence different producers within the OPEC+ group to carry output regular.
“The choice got here as an enormous shock because the organisation struggled yesterday to comply with a deal,” Capital Economics stated in a word.
It “provides weight to our view that the oil market can be in a deficit … which can assist carry the worth of Brent to $60 per barrel by end-year,” it stated.
OPEC member Iran’s seizure of a South Korean tanker within the Gulf additionally supported costs on Wednesday.
Tehran denied it was holding the ship and its crew as hostages, a day after it seized the tanker whereas pushing for Seoul to launch $7 billion of funds frozen beneath U.S. sanctions.
U.S. crude oil inventories dropped by 1.7 million barrels within the week to Jan. 1 to 491.three million barrels, information from business group the American Petroleum Institute confirmed late on Tuesday.
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