U.S. crude oil futures in West Texas ended higher this week after good news from OPEC + on Thursday. The market was about to end the week lower until OPEC and its allies made an announcement that may have shaken some of the weakest shorts from their positions.
Until then, the catalysts that weighed on prices were the resumption of traffic on the Suez Canal after a huge ship blocking the landmark was released earlier in the week, mixed US inventory data, a US dollar stronger, fear of rising Iran supply and concern over a weakening demand recovery.
OPEC + agrees to gradually increase crude oil production
OPEC and its allies announced that they have decided to gradually increase oil production by about 2 million barrels per day from May to July, cautiously advancing at the pace of the global economic recovery from the COVID-19 pandemic.
According to reports, the group known as OPEC + is restoring production that fell last year to support prices, as demand declined during the worst pandemic recession, which undermined fuel demand. The group will add 350,000 barrels a day in May, 350,000 in June and 400,000 in July.
Traders reacted by raising prices on Thursday, suggesting they had been setting prices on a more aggressive rise in production in May. Despite the concentration, the news is not particularly bullish, so gains could be limited in the short term.
Traffic begins to flow in the Suez Canal
Boats …