Oil price continues to climb after OPEC+ production cut

Oil price continues to climb after OPEC+ production cut

Oil built on the largest gain in a year after OPEC+ delivered an unexpected and substantial production cut in a shift that tightened the global crude market, widened key timespreads, and likely punished short sellers.

There’s concern that the move by OPEC+ will inject fresh vigor into inflationary pressures, with US Treasury Secretary Janet Yellen criticizing the group’s decision as “unconstructive.” Still, President Joe Biden downplayed the issue, saying late on Monday its impact is likely not “as bad as you think.”

West Texas Intermediate advanced toward $81 a barrel after rallying by more than 6% on Monday. The surprise reduction in supply by the Organization of Petroleum Exporting Countries and its allies blindsided the global crude market, prompting many banks to jack up price forecasts, although some bears remain.