Crude Price Hikes Following OPEC Meeting

Crude Price Hikes Following OPEC Meeting

On April 1, OPEC meeting was held through online video, and the members reached an agreement to raise the total daily crude oil output by 350 thousand barrels, 350 thousand barrels and 441 thousand barrels in May, June and July respectively.

The decision to slight raise the crude oil output in the next three months largely met participants’ expectation, and the gradual crude oil output revival supported the market sentiment. Saudi Arabia had been implementing additional crude oil output reduction since February, and that will be gradually cancelled from May to July. Supported by the OPEC meeting and the depreciation of USD, the international crude oil prices improved on April 1. Therein, WTI and Brent closed at $61.45/bbl and $64.86/bbl respectively, up over 3% from March 31.

However, SCI reckons that after the Easter Day holiday, the support from the meeting result to the crude oil market will weaken, and participants will pay attention to the crude oil demand drop caused by repeated pandemic as well as crude oil supply growth. On the whole, the international crude oil prices are unlikely to rise obviously but will trend flat for a period.

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