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The price of crude oil returned on Tuesday to the recent highs seen after OPEC+ announced it would cut production by another 1.6 million barrels per day.
On April 2, OPEC+ announced that it would cut its crude oil production by another 1.66 million barrels per day (including the 500,000 bpd Russian production cut) on top of its 2 million bpd cut. Naturally, oil prices spiked following the news, reaching gains of 8% at the Monday open. Brent was trading at more than $86 per barrel, with WTI trading at nearly $81. Further gains were made after opening, with WTI reaching $81.69
Today, the price of WTI has climbed by more than 2% on the day to $81.37, with Brent climbing 1.50% to $85.44. And prices were still rising at the time of writing.
A Tuesday report by Energy Intelligence showed that OPEC+’s total March production was 680,000 fewer barrels per day than the month prior, falling to 37.64 million bpd. Most of the production drop was attributed to Nigeria and Russia, which together accounted for 440,000 bpd of the production decline.
Fears of tighter supply as a result of the ever-elusive but always-present China reopening schtick clashing with OPEC+’s supply decreases are most likely behind the Tuesday price moves.
U.S. gasoline prices continue to tick upward as well, along with the price of oil. Tuesday’s national average gasoline prices were $3.608 per gallon, according to AAA—an increase of more than $0.10 from a week ago, accounting for most of the $0.134 per gallon rise over the last month.
While Brent and WTI prices were climbing on Tuesday, WCS prices were falling, losing 1.61% and reaching $58.49.
Citigroup said on Tuesday that it is estimating that prices will fall below $80 on China’s slower-than-expected recovery.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.