Oil prices rise as OPEC+ extends output cuts

A pump jack on an oil well. [Photo: Wikimedia]
Oil prices rose on Monday after OPEC+ decided to extend output cuts by a year, although renewed cease-fire hopes in Gaza might lead to lower prices.

Brent crude, the international benchmark, was trading at $81.23 per barrel at 10:25 a.m. local time (0725 GMT), up 0.15% from the previous session’s close of $81.11 per barrel.

The American benchmark, West Texas Intermediate (WTI), was trading at $77.11 per barrel at the same time, a 0.16% increase from the previous close of $76.99 per barrel.

The OPEC+ decision to extend production cuts until 2025 contributed to the price increase.

The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, met on Sunday to discuss member countries’ production output.

The group’s overall crude oil production under the Declaration of Cooperation will be about 39.72 million barrels per day (bpd) from January 1, 2025, to December 31, 2025.

Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman met in Riyadh during the OPEC+ meeting.

The countries decided to extend the additional voluntary cuts of 1.65 million bpd, announced in April 2023, until the end of December 2025.

Additionally, they agreed to prolong the additional voluntary cuts of 2.2 million bpd, announced in November 2023, until the end of September 2024. These 2.2 million bpd cuts will be gradually phased out monthly until the end of September 2025.

Meanwhile, US Secretary of State Antony Blinken had separate phone calls on Sunday with two Israeli ministers regarding the cease-fire proposal announced by President Joe Biden last week.

Biden urged Hamas to accept the deal and encouraged Israeli Prime Minister Benjamin Netanyahu to withstand pressure from coalition members opposed to the plan.

State Department spokesman Matthew Miller said that in the call with Israeli Defense Minister Yoav Gallant, Blinken “commended Israel’s readiness to conclude a deal and affirmed that the onus is on Hamas to accept.”

Hamas stated it would “respond positively to any proposal that includes a permanent cease-fire, a full withdrawal of Israeli forces from the Gaza Strip, reconstruction efforts, the return of the displaced, and the completion of a comprehensive hostage exchange deal.”

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