Oil on pace for monthly gain as OPEC+ expected to extend cuts, inflation rises as expected

Energy
Thursday, February 29th, 2024 7:02 pm EDT

Crude oil futures are on track for a second consecutive monthly gain as OPEC+ plans to prolong its production cuts and recent inflation data aligns with expectations. Despite the Commerce Department’s report showing a rise in inflation in January, crude futures remained relatively stable. The West Texas Intermediate (WTI) contract for April saw a marginal increase of 0.09% to $78.61 a barrel, while the April Brent contract, set to expire Thursday, dipped slightly by 0.06% to $83.64 a barrel. The personal consumption expenditures price index, a key inflation metric for the Federal Reserve, rose by 0.4% for the month and 2.8% from a year earlier. Traders’ expectations regarding the timing of potential Fed interest rate cuts remained largely unchanged, with the market anticipating the first cut possibly in June. Both U.S. and Brent crude have seen a 6% increase month-to-date, with near-term contracts trading at a premium compared to future months, indicating a tightening oil market. OPEC+ is contemplating extending its production cuts, initially agreed upon in November to curb excess supply amid heightened output from other countries like the U.S., Canada, Guyana, and Brazil. Amidst rising tensions in the Middle East, particularly along the Israel-Lebanon border and ongoing attacks by Houthi militants in the Red Sea, crude prices have surged. However, crude production in the region remains unaffected by the conflict thus far, although analysts caution about the potential impact on the oil market if tensions escalate into a direct confrontation between Iran and the U.S.

For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/29/oil-on-pace-for-monthly-gain-as-opec-expected-to-extend-production-cuts.html