Oil prices rise on high demand & OPEC+ decision

Oil prices were climbing on Monday morning, as Saudi Arabia signals strong demand and investors digest the decision by OPEC+ to stick to its output boost plan.

The price of global benchmark Brent crude January futures grew by 84 cents or 1% to $83.58 a barrel by 06:09 GMT, trading data shows. US benchmark West Texas Intermediate (WTI) rose by 95 cents or 1.2% to $82.22. Both benchmarks reversed last week’s losses of 2% and 3% respectively.

On Friday, Saudi Arabia’s state-owned oil supplier, Saudi Aramco, raised its December selling price to Asia for its Arab light crude to $2.70 a barrel, up $1.40 from this month. The move is viewed as a sign that “demand remains strong,” analysts at ANZ Research say, as cited by Reuters.

Also, oil traders continue to play on the recent OPEC+ decision to stick to the planned 400,000 barrels per day increase in production, despite US calls to do more. US President Joe Biden repeatedly urged OPEC+ to boost output further to help curb rising prices at the pump in recent months. However, after the group’s decision last week, he said his administration will use “other tools” to deal with gasoline prices. 

OPEC+ producers are not eager to boost output too quickly, fearing new Covid outbreaks could dampen the global economic recovery. Commenting on the OPEC+ decision, Russian Deputy Prime Minister Alexander Novak said that since August, OPEC has already added 2 million barrels per day to global supply and will continue this course of action through the early months of 2022.

“There are some signs of decreased oil demand in the European Union in October. Global oil demand is still under pressure from the Delta Covid-19 variant,” Novak stated, explaining the group’s decision not to add more barrels to the market.

For more stories on economy & finance visit RT's business section