On Monday, the global price of crude oil were little changed as the Organisation of Petroleum Exporting Countries (OPEC) and its allies members (OPEC +) extended output cut for the second quarter of the year.
OPEC+ members agreed to extend their voluntary 2.2 million barrels per day oil output reduction through the end of June largely in line with market expectation. Brent traded little changed at $83.5 per barrel in the morning trading session.
Saudi Arabia will continue to dominate the pledged output reduction share at 1 mbpd, while Russia promised to focus more on oil output cuts rather than exports. The group further added that “these voluntary cuts will be returned gradually subject to market conditions.”
Preliminary OPEC production numbers for February are starting to come through and suggest that oil output increased slightly as Libya resume oil production at its biggest field,while some producers pumped more than the agreed oil output cut limits for the month.
OPEC output rose by 0.1 mbpd month-on-month to 26.7 mbpd last month. Libya led the gains with its production rising by 120 mbpd, up by 11.2% month on month to 1.1 mbpd as it resumed its Sahara oil field, which was closed earlier due to protests this year.
This was followed by Nigeria with oil output rising by 2% month on month to 1.52 mbpd. Meanwhile, Iraq and UAE together produced almost 400 mbpd above their agreed oil output limits in February.
Weekly data from Baker Hughes shows that the US oil rigs rose by three rigs over the last week, with the total oil rig count increasing to 506 for the week ending 1 March 2024, the highest rig count since the week ending 22 September 2023.
The latest positioning data from CFTC shows that speculators increased their net long positions. The ongoing uncertainty in the Middle East and concerns over tightening supply are currently supporting the uptrend in speculative bets.