Oil jumps as Opec+ resists output increase

London  — Oil rose sharply to multiyear highs on Monday after  reports that oil cartel Opec+ would stick to its current output policy.

The producer club will conform to their existing agreement and unleash a further 400,000 barrels per day (bpd) in November, a source said. 

Brent crude was up $1.97 or 2.5%, at $81.25 per barrel in London. It rose 1.5% last week for its fourth consecutive weekly gain and was back up to highs last seen in 2018.

West Texas Intermediate rose $1.79, or 2.4%, to $77.67 after gaining for the past six weeks and was at its highest since 2014.

Oil prices have been driven higher by a rise in global demand and supply disruptions, pushing Brent last week above $80 to its highest in nearly three years.

Opec+, which groups the Organisation of the Petroleum Exporting Countries and allies including Russia, has faced pressure from some countries to add back more barrels to the market to help to lower prices as demand has recovered faster than expected in some parts of the world.

Opec+ agreed in July to boost output by 400,000 bpd each month until at least April 2022 to phase out 5.8-million bpd of existing production cuts.

The oil price rally has also been fuelled by an even bigger increase in gas prices  that have spiked by 300% and are trading at about $200 a barrel in comparable terms, prompting switching to fuel oil and other crude products to generate electricity and for other industrial needs.

Reuters