Oil Prices Surge with Expansion of Production Cut

WikiFX News (19 June)- After yesterdays OPEC+ Joint Ministerial Supervisory Committee (JMMC) meeting, oil prices started rising to a new weekly high.

On Thursday (June 18), WTI rose sharply by 5% from its intraday low of US$37.33 to an intraday high of US$39.48, breaking the US$39.0 level and surging to a new high in more than a week since June 10th.

The OPEC+ Joint Ministerial Supervisory Committees draft statement from the same day showed that Iraq and Kazakhstan submitted compensation plans to OPEC+ for excess crude oil production. This plan is equivalent to announcing that OPEC+ will further increase its share of production cuts in the next few months, thereby driving oil prices stronger.

Earlier, OPEC+ set an 87% implementation rate for the 970 barrels/day production cut target. Five OPEC+ countries including Saudi Arabia, UAE and Kuwait completed 97% or more of the production reduction target. This, and many other factors, have driven oil prices to record high.

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