WTI soars past $80 per barrel as oil market tightens
The price of a WTI barrel soared to heights not seen since November as the market braces for an OPEC+ decision on oil production levels in April and beyond.
WTI was trading at $80.04 per barrel at 10:42 am ET, an increase of $1.78 per barrel on the day, or 2.27%. Behind the rise in price is the market’s anticipation that OPEC+ will extend its voluntary production cuts for the next quarter and the volatility that could come from updated U.S. crude oil and crude products inventory data that will be released from the American Petroleum Institute (API) at 4:30 pm ET on Tuesday.
WTI prices are now at their highest level since early November 2023.
Brent crude oil prices were also trading up on the day, at $83.66 per barrel, up $1.75 or 2.14%–also to their highest level since November.
The market is anxiously awaiting a decision from OPEC+ on the plan for Q2 2024. The group has yet to divulge a date when it will meet to discuss the issue with its members, although April is quickly approaching. OPEC+ will need to determine whether it will stay the course and extend the current voluntary production cuts into the second quarter, whether it will deepen the cuts, or whether it will scale them back or scrap the cuts altogether.
Most industry watchers favor the first option, arguing that OPEC+ has no choice but to extend the current level of production cuts if it wants to keep prices from falling.
Tuesday’s price rise does provide OPEC+ with a bit of cover, although OPEC+ still insists it is not managing prices but managing supply based on market needs.
