Brent hovers near four-month high as OPEC+ extends production cuts

International benchmark Brent rose in European trade on Monday, maintaining gains for the third straight session and hovering near four-week highs after the OPEC+ coalition extended production cuts until the end of the second quarter. 

Saudi Arabia, OPEC’s top producer, also extended its voluntary 2-million bpd production cut until the end of June to support market stability.

Prices

Brent rose 0.9% to $84.05 a barrel, with a session-low at $82.98, after rising 1.7% on Friday, scaling a four-month high at $84.30. 

Brent also rallied 2.1% last week, the third weekly profit in a month, on hopes for improving demand in China.

OPEC+ Cuts

The OPEC+ coalition announced an extension to voluntary production cuts at 2.2 million bpd, which were scheduled to end this March. 

Saudi Cuts

Saudi Arabia additionally extended its separate voluntary cuts of 1 million bpd until the end of June. 

The country estimates Saudi production to remain at 9 million bpd in the next three months.

Russian Cuts 

Russia, a major member of the OPEC+ alliance, will also cut its production and exports by 471 thousand bpd until the end of June. 

Outlook 

Rystad Energy analysts believe the new step is representative of strong unity in the group, which was dented after Angola’s recent withdrawal from OPEC. 

And it’s also a sign of determination to defend the $80 a barrel line for prices.