Oil advanced with OPEC+ producers reaching a tentative agreement to add limited supplies to the market in the coming months.
Futures in New York rose as much as 3.7% on Thursday to the highest intraday level since 2018. Negotiations between OPEC+ producers, including the alliance’s de facto leaders, Saudi Arabia and Russia, are still underway, delegates said, as ministers gathered online. The proposal under discussion would add about 2 million barrels a day to the cartel’s output between August and December, they said.
“OPEC is looking like it’s going to keep some restraint, and to me, the market is in a really good place,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “People are very comfortable and constructive with the profile over the next year.”
Oil posted the best half since 2009 as prices grind higher, aided by a global recovery taking place from the U.S. to Europe and China. Crude inventories in the U.S. are falling at the fastest rate in decades with shale producers remaining disciplined. Citigroup Inc. expects the oil market to remain in a deep deficit even after accounting for higher OPEC+ output through the summer.