Oil is surging close to $80 a barrel as various market indicators signal strength, and OPEC+ gears up to decide on extending supply cuts into the next quarter.
With U.S. crude futures marking a 2% increase, rising prompt spreads for both Brent and West Texas Intermediate benchmarks indicate a tightening of physical markets. The situation is influenced, in part, by numerous tankers avoiding the Red Sea due to attacks by Yemen’s Houthi militants.
Despite geopolitical tensions, including the Israel-Hamas conflict, supporting some gains, factors like increasing non-OPEC supply and concerns about China’s economic outlook have prevented a more significant rally.
OPEC+ is anticipated to continue its current supply cuts to prevent a global glut and support oil prices, according to a recent Bloomberg survey. The group has implemented approximately 2 million barrels per day of production curbs.
