OPEC+ To Extend Oil Production Cuts Till April. The Organization of the Petroleum Exporting Countries Plus, in its latest meeting, agreed to extend production cuts from March to April 2021.
Saudi Arabia would continue its voluntary cuts of 1mnbopd (total cuts: ~2.9 million barrels of oil per day), while Russia and Kazakhstan would be allowed to ease cuts by a total of 150kbopd.
Thus, total OPEC+ production cuts still stand at ~8mnbopd (versus pre-Covid-19 levels).
Brent oil prices have spiked on the back of this extension, against the expected easing of production cuts by 0.5mnbopd, along with Saudi Arabia rolling back its voluntary incremental cuts of 1mnbopd.
Share price of oil and gas companies including GAIL India Limited and Oil and Natural Gas Corporation (ONGC) Limited surged on Friday, March 5, after global oil prices jumped more than $1 a barrel, hitting their highest levels in almost 14 months. This came after OPEC and its allies agreed not to increase the supply in April as they await a more substantial recovery in demand amid the COVID-19 pandemic. On Friday, GAIL India surged over two per cent on the BSE. It opened at ₹ 144.05, touching an intra day of ₹ 149.95 and an intra day low of ₹ 144.05, so far. Shares of ONGC opened on the BSE at ₹ 116.25, touching an intra day high of ₹ 118.20 and an intra day low of ₹ 113.90, so far.
Due to the rally in global crude oil price, petrol and diesel rates in the country have also registered an upswing since January 6, 2021. Oil Minister Dharmendra Pradhan said that the OPEC+ decision to continue with the output cuts would hurt consumers in oil buying nations. The rise in oil prices has also posed economical challenges in India, where heavily-taxed retail fuel prices have touched fresh record highs in some parts of the country.
Meanwhile, Brent crude futures for May rose to as high as $68 a barrel on Friday, a level which has not been achieved since January 8, 2020. The contract was up $1.09, or 1.6 per cent, to $67.83 a barrel at 0730 GMT, and was on track for a near three per cent gain in the week.
U.S. West Texas Intermediate (WTI) crude futures climbed 93 cents, or 1.5 per cent, to $64.76 per barrel after hitting a high of $64.94 earlier in the session.
