Energy
Friday, March 1st, 2024 4:25 pm EDT
Key Points
- Crude oil futures surged over 1% on Friday, indicating a tightening market ahead of an upcoming OPEC+ decision on production cuts.
- The West Texas Intermediate (WTI) contract for April rose by $1.51, or 1.93%, reaching $79.77 a barrel, while May Brent futures climbed $1.40, or 1.71%, to $83.31 a barrel.
- OPEC+ is contemplating extending production cuts into the second quarter and possibly for the remainder of the year, with a decision expected in the first week of March. This decision comes amidst signs of a tightening oil market and increasing geopolitical tensions.
Crude oil futures surged over 1% on Friday, reflecting indications of a tightening market in anticipation of an upcoming decision by OPEC+ regarding production cuts. The West Texas Intermediate (WTI) contract for April rose by $1.51, or 1.93%, reaching $79.77 per barrel, while May Brent futures climbed $1.40, or 1.71%, to $83.31 a barrel. Both U.S. crude and the global benchmark recorded a second consecutive monthly gain, with front-month contracts trading at a premium compared to later months, typically signaling a tightening oil market. OPEC+ members are contemplating extending production cuts into the second quarter and potentially for the remainder of the year, according to sources within the organization. A decision on these cuts is expected in the first week of March. Analysts speculate that Brent crude futures could escalate to the $95 per barrel range in the second quarter, driven by bullish market sentiment. Paul Ciana, a technical analyst at Bank of America, suggests that a breakout above the resistance level of $84.80 to $85 per barrel for Brent would confirm an upward trend. However, maintaining support levels around $79.50 to $80 per barrel in March is crucial; failure to do so could lead to a decline to the $75 to $73 per barrel range. Meanwhile, geopolitical tensions persist, with cease-fire negotiations in the Israel-Hamas conflict facing obstacles following casualties in Gaza City. Israeli Prime Minister Benjamin Netanyahu affirmed his rejection of international pressure to halt the conflict prematurely, insisting on achieving all war objectives before considering peace talks.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/01/crude-oil-today-wti-brent-jump-as-market-tightens.html
