Oil Rises After OPEC Warns On Production Cuts

By Glenn Dyer | More Articles by Glenn Dyer

Oil bounced back strongly from the previous week’s losses.

Both West Texas Intermediate and Brent crudes saw gains around 10% for their biggest weekly gains since June.

Driving the rise was the confident talk from OPEC about compliance with its 7.7 million barrels a day production cut.

Bullish (as the market saw it) views on Chinese demand and industrial production also helped lift confidence.

The OPEC and their allies, collectively known as OPEC+, held a Joint Ministerial Monitoring Committee meeting Thursday, extending the period during which countries that failed to limit production adequately in earlier months can make compensatory reductions.

OPEC+ in August relaxed earlier output curbs to 7.7 million barrels a day in August, from the initial 9.7 million barrels.

During the meeting, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman stressed the need for all countries to stick to their production ceilings.

October West Texas Intermediate crude rose 14 cents, or 0.3%, to settle at $US41.11 a barrel in New York but Brent November futures lost 15 cents, or nearly 0.4% at $US43.15 a barrel in Europe.

For the week, WTI was up 10.1%, the largest weekly rise for a front-month contract since the week ended June 5, according to Marketwatch.com. Brent added 8.3%, the strongest rise since the week ended June 19.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →