Oil hits 5-month peak on early Thursday trade following OPEC+ decision

Oil surged to approach a five-month peak following OPEC+’s decision to uphold current production cuts until the end of June, tightening the global market amid robust demand, Bloomberg reported on Thursday.

Brent crude neared $90 per barrel, rising over 2 per cent in the past two sessions, while West Texas Intermediate (WTI) hovered around $86.

Despite no policy changes being recommended at Wednesday’s meeting, compliance with OPEC+ quotas remains a concern, with Iraq exceeding its target in March but committing to compensate by reducing output. Russian exports have also increased recently.

ANZ Banking Group Ltd.’s senior commodity strategist, Daniel Hynes predicts further declines in OPEC+ production in the coming months, as members emphasise adhering to agreed cuts.

Brent, the global benchmark, has climbed approximately 16 per cent this year due to supply constraints, shipping disruptions, and Ukrainian attacks on Russian refineries.

Asian demand is showing signs of recovery, and Federal Reserve Chair Jerome Powell hinted at potential US rate cuts later this year, pending clearer signs of lower inflation.

US crude inventories surged by 3.21 million barrels last week, contrasting with forecasts for a decline, though gasoline stocks saw their largest drop since March, indicating potential upward pressure on futures prices and at the pump for American consumers.