Crude oil futures rallied on Tuesday, with U.S. and global benchmark prices marking their highest settlements in more than two years, after the OPEC and their allies kept their current plan to increase oil production through July in place. The oil-producer group known as the OPEC reaffirmed the existing commitment to gradually return 2 million barrels a day of the adjustments to the market.
Ann-Louise Hittle, vice president of Macro Oils, at Wood Mackenzie said that sticking to increases planned at the April meeting is what the market needs. Demand growth is outpacing supply gains even with the agreed month-by-month OPEC production increases taken into account.
According to the market condition the pace of that return of production will be determined said in a press release issued just after the short meeting concluded. The next OPEC will be held on July 1.At a meeting on April 1, the group of producers said it would raise daily oil production by 350,000 barrels in May, 350,000 barrels in June and by 441,000 barrels in July. Saudi Arabia would roll back its voluntary output cut by 250,000 barrels a day in May, 350,000 barrels a day in June and by 400,000 barrels a day in July.
West Texas Intermediate crude for July delivery CLN21 CL.1 climbed $1.40, or 2.1%, to settle at $67.72 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw their highest settlement since Oct. 22, 2018, according to Dow Jones Market Data.