London, Europe Brief News – Oil prices have risen after major producers agreed to continue to cut output.
Brent crude rose by about 0.6% to above $86 a barrel on Monday morning.
On Friday, the G7 agreed to cap the price of Russian oil at $60 a barrel to raise pressure on Russia over the invasion of Ukraine.
Meanwhile, oil producers’ group Opec+ said at the weekend it would stick to its policy of reducing output.
Oil prices are defying expectations and are barely higher on the year, as the outlook for oil demand continues to deteriorate for now.
Opec+ is a group of 23 oil-exporting countries, including Russia, which meets regularly to decide how much crude oil to sell on the world market.
“This decision by Opec+ to keep the quota where it is… is by itself an implicit sort of support to the oil market,” Kang Wu of S&P Global Commodity Insights said.
Analysts said oil prices had also been boosted by the easing of Covid restrictions in some Chinese cities, which could lead to an increase in demand for oil.
More cities in China have said they will loosen curbs after mass protests against zero-Covid policy.
Ukraine-Russia War Pressure
The apparent gradual ban on Russian oil imports will be “adding tightening pressure to oil markets”, head of NBD, said.
Russia is the world’s second-largest energy exporter. It accounts for 10% of the world’s energy output, including 17% of its natural gas and 12% of its oil. The US and UK have already banned Russian oil imports.
The oil market has seen tumultuous trading since Russia’s war in Ukraine started in late February. Volatility in crude prices during the past few weeks has been at the highest level since June 2020.
