Oil prices rose on Monday after OPEC+ extended its current production cuts into 2025, although speculation over a ceasefire in Gaza limited the gains. Concerns over sluggish demand weighed on the market, following weaker-than-expected purchasing managers index data from top oil importer China. Fears of interest rates staying high for longer also contributed to crude prices nursing losses from the previous week.
Brent oil futures expiring in August gained 0.3 percent to $81.33 per barrel, while West Texas Intermediate (WTI) crude futures held steady at $77.00 per barrel by 21:06 ET (01:06 GMT). Both contracts fell between 0.6 percent and 1 percent last week.
OPEC+ extends production cuts
The Organization of Petroleum Exporting Countries and its allies (OPEC+) decided to extend its current production cuts at a meeting held on Sunday. The cartel, led by Saudi Arabia and Russia, will keep about 5.8 million barrels per day of production offline until at least early-2025. Specifically, the group will maintain 3.6 million barrels per day of cuts until the end of 2024, while 2.2 million barrels per day of cuts will be phased out between October 2024 and September 2025.
The move was widely expected by the markets, as OPEC+’s cuts were aimed primarily at supporting oil prices through tighter markets. The cartel said it was waiting to see a broader improvement in economic conditions and lower interest rates before it would begin increasing production.
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