U.S. crude oil futures approached $80 a barrel for the first time in over four months, indicating a tightening market ahead of an OPEC+ decision on production cuts.
The West Texas Intermediate contract for April closed at $79.97 per barrel, marking the highest closing price since November 6. May Brent futures also increased to $83.94 per barrel.
OPEC+ is considering extending output cuts through the second quarter and potentially until the end of the year, with a decision expected within the first week of March. Paul Ciana of Bank of America warns that Brent oil futures might reach $95 per barrel in the second quarter.
For the first time in over four months, U.S. crude oil futures approached $80 a barrel as indications of a tighter market before an OPEC+ decision on production cuts.
(Photo : by MARK FELIX/AFP /AFP via Getty Images)For the first time in over four months, U.S. crude oil futures approached $80 a barrel as indications of a tighter market before an OPEC+ decision on production cuts.
The West Texas Intermediate contract for April closed at $79.97 per barrel on Friday, up 2.19%, or $1.71, from the previous day. This is the highest closing price for US oil since November 6. At $83.94 a barrel, May Brent futures increased by 2.09%, or $1.71.
February saw a second straight month of gains for both U.S. crude and the global benchmark as near-month contracts traded at a premium to later months, usually an indication of a tighter oil market.
According to three sources inside the group, OPEC+ is thinking about extending its output cuts through the second quarter and potentially until the end of the year. The cartel and its partners will decide on the cutbacks within the first week of March.
April 3rd is the date of OPEC's next official Joint Ministerial Monitoring Committee meeting. Paul Ciana, a technical strategist at Bank of America, warned clients in a note on Thursday that Brent oil futures might break out to the $95 per barrel level in the second quarter as bulls have gotten more aggressive in purchasing at ever-higher lows.
The global benchmark would need to maintain a support level of about $80 per barrel in March, according to Ciana, before a breakthrough through a resistance level at $85 per barrel for Brent would validate a shift to the upside. According to him, the benchmark may go all the way to $73-$75 per barrel, the lowest point in its range, if Brent drops below that level.
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