Oil prices see upward push from four-month lows

Photo: Imperial College London

Global news outlets report oil futures saw a price jump of 1%, rebounding from a four-month low following OPEC+ members’ announcement of plans to increase production starting in October 2024.

US crude and global benchmark Brent are down nearly 4% this week after eight OPEC+ members agreed on Sunday, to gradually phase out 2.2 million barrels per day in production cuts.

West Texas Intermediate’s July contract, closing price was reported at USD 74.07 per barrel, up 82 cents. Year to date, US crude oil is up 3.3%. Brent, global benchmark’s August contract closing price was reported at USD 78.41 per barrel, a 1.15% jump with a year to date increment of 1.78%.

US crude oil has a history of bouncing from oversold territory rather quickly versus camping out in the basement for days on end, said Bob Yawger, executive director futures at Mizuho Securities. He added that US oil could rally back to a range of USD 76.15 to USD 80.62 per barrel in the coming days.

Meanwhile, there were others who were skeptical over OPEC+ Sunday decision.

Helima Croft, head of global commodity strategy at RBC Capital Markets said that the OPEC+ plan to increase oil supply is not binding, and added Saudi Arabia will likely “hit the kill switch” on a fourth-quarter production increase if the market is oversupplied or sentiment is poor by September.

This is the first time Brent crude oil prices have fallen below USD80 a barrel since February this year.

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