Crude Continues To Rally On Back Of OPEC+ Output Cut

Crude has continued to rise during APAC trading today. After rising over 6% on Monday it is up a further 0.5%, as the impact of OPEC+’s output cut announcement continued to be felt in markets. The USD index is up 0.1%.

• Brent is now about $85.34/bbl, close to the intraday high of $85.41. WTI is trading around $80.82 after reaching a high of $80.91. Prices are their highest since late January 2023.
• While there are concerns that the cut in crude production and the subsequent increase in prices will be inflationary. US President Biden said today that the impact is unlikely to be “as bad as you think”.
• According to Bloomberg, OPEC+ began to discuss the need to change the output quota on March 20 when Brent fell to a 15-month low.
• While Goldman Sachs has increased its oil price forecasts, Morgan Stanley reduced its projections on the back of disappointing demand from China and Citigroup doesn’t believe that prices will return to $100 quickly.
• Later the Fed’s Cook, Collins and Mester speak. Bank of England’s Pill is also due to talk. There is little on the data calendar with February US JOLTS job openings the main release.