Brent Crude Price Hits $79.70 as OPEC+ Cuts Take Hold

The Brent crude oil price has seen an increase of $1.83 per barrel on the day, reaching $79.70 per barrel at 09:00 GMT.

This upward momentum is largely due to supply-side dynamics, with OPEC+ members Saudi Arabia, Russia, and Algeria pledging to continue crude production cuts into August. This amounts to an output reduction of over 1.5 million barrels per day, providing support for the Brent futures market.

Market analyst Phil Flynn from Price Futures Group notes that data suggests Russia is showing signs of compliance with these cuts, although some may attribute this to seasonal factors.

In addition to supply-side dynamics, global oil demand is also expected to grow. The US Energy Information Administration (EIA) forecasts that global oil demand will surpass global crude supply by around 100,000 barrels per day in 2023 and by around 200,000 barrels per day in 2024.

However, some downward pressure on the Brent price was felt after US crude inventories increased by around 3 million barrels in the week ended July 7. This was reported by Reuters citing API data, which was more bearish than expected.