Investing.com – Oil markets will focus on the fallout from last week’s decision by major producers to start pumping more crude to compensate for losses in global production.
Oil ministers from the Organization of Petroleum Exporting Countries (OPEC), Russia and other major producing countries .
In a statement following its meeting in Vienna, OPEC said that it would go back to 100% compliance with previously agreed output cuts but gave no concrete figures, making it difficult to understand how much more it will pump.
Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd). Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas.
The deal gave a tacit green light to Saudi Arabia, OPEC’s de-facto leader, to produce more than currently allowed by OPEC as the 14-nation organization avoided setting individual country targets.
OPEC and non-OPEC producers have been curbing output by about 1.8 million bpd since January 2017 to prop up oil prices and reduce high global oil stocks.
, with U.S. prices enjoying their biggest daily gain since November 2016, as the output boost was seen as smaller than markets had initially expected.
U.S. benchmark oil, August surged $3.04, or around 4.6%, to settle at $68.58 a barrel on the New York Mercantile Exchange. It saw its highest finish in around a month and gained about 5.8% for the week.
Elsewhere, September , the global benchmark, jumped $2.52, or 3.4%, to end at $75.32 a barrel on the ICE Futures Europe exchange. They enjoyed a gain of roughly 2.9% for the week.
Oil traders will also continue to weigh U.S. production levels in the week ahead after the number of active U.S. rigs drilling for oil fell by 1 last week to 862, General Electric (NYSE:)’s Baker Hughes energy services firm said in its closely followed report on Friday. That slight decline followed four straight weeks of increases.
Domestic oil output – driven by shale extraction – is currently at an all-time high of 10.9 million bpd. Only Russia currently produces more, at around 11 million bpd.
Fresh weekly data on U.S. commercial crude inventories on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise will capture the market’s attention.
Ahead of the coming week, Investing.com has compiled a list of the main events likely to affect the oil market.
Tuesday, June 26
The American Petroleum Institute is to publish its .
Wednesday, June 27
The U.S. Energy Information Administration will release its .
Friday, June 29
Baker Hughes will release .
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