Oil On Track To Spike Higher? Report Says OPEC+ All Set To Extend 2 MBOE/Day Output Cut At Least Until Middle Of Year
Portfolio Pulse from Shanthi Rexaline
OPEC+ members have reportedly agreed to extend their production cuts of around two million barrels per day until the end of the second quarter, according to Bloomberg. This decision comes despite oil's rebound this year, with WTI-grade crude oil increasing by 11.6% after a decline of 8.6% in 2023. The production cuts, initially announced in November last year, aim to stabilize the market. The United States Oil Fund, LP (USO) saw a 2.18% increase in its stock price following the news.
March 03, 2024 | 4:17 pm
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The United States Oil Fund, LP (USO) experienced a 2.18% increase in its stock price following reports of OPEC+ extending production cuts.
The extension of production cuts by OPEC+ is likely to keep oil prices elevated or potentially push them higher, which benefits oil-related assets like USO. Given USO's direct correlation with oil prices, the news of extended production cuts supports a bullish outlook for USO in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90