InvestorQ : What is the outlook for oil as crude has touched a 11-month high price?
prachi Patwardhan made post

What is the outlook for oil as crude has touched a 11-month high price?

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sara Kunju answered.
1 month ago
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Oil rose to its highest level since February 2020. This was triggered after Saudi Arabia agreed to cut its daily oil output much more than expected during the OPEC meet. Oil also got a boost from a sharp fall in US stockpiles. In fact, Brent crude touched a level of $54.09/bbl, a level last seen on 26 Feb this year. Even WTI crude crossed $50/bbl on Thursday.

In addition to the agreed cuts, Saudi Arabia agreed to make an additional voluntary cut of 1 million bpd to allow greater room for other OPEC and OPEC plus nations. The idea was to incentivize other producers to hold output steady in tough times. However, even the Saudi Oil Minister has expressed concerns that prices may once again taper despite supply cuts if the demand did not pick up adequately.

Oil also got a boost after Iran had held a South Korean tanker hostage demanding the immediate release of $7 billion in funds frozen by Seoul in response to US sanctions.

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