Oil prices rise after OPEC+ keeps output cut targets

05 Dec Oil prices rise after OPEC+ keeps output cut targets

Oil prices rose on Monday after OPEC+ nations held their output targets steady ahead of a European Union ban and a price cap kicking in on Russian crude.

Also, in a positive sign for fuel demand, more Chinese cities eased COVID-19 curbs over the weekend, though the partial easing in policies sowed confusion across the country on Monday.

While prices rose as much as 2% earlier in the day, both the Brent and U.S. West Texas Intermediate (WTI) contracts have since pared some gains. Brent crude futures were last up 49 cents, or 0.6%, to $86.06 a barrel at 0700 GMT, while WTI crude futures gained 51 cents, or 0.6%, to $80.49 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) from November through 2023.

Analysts said the OPEC+ decision was expected as major producers wait to see the impact of the EU import ban and Group of Seven (G7) $60-a-barrel price cap on seaborne Russian oil, with Russia threatening to cut supply to any country adhering to the cap.

Business and manufacturing activity in China, the world’s second largest economy and top crude oil importer, have been hit this year amid strict zero-tolerance measures to curb the spread of the coronavirus.