Oil prices rose more than 1% on Wednesday on supply concerns as OPEC+ agreed to leave its output policy unchanged and as the U.S. banned Chevron (CVX.N), opening up new opportunities to export Venezuelan crude.
Investors had anticipated OPEC+ members would agree to increase output later this week.
Brent crude futures settled up 81 cents, or 1.26%, at $64.90 a barrel. U.S. West Texas Intermediate crude rose 95 cents, or 1.56%, to $61.84 a barrel.
OPEC+, the Organization of the Petroleum Exporting Countries and its allies, left output policy unchanged. They agreed to establish a mechanism to set a baseline for its oil output for 2027. Most oil-producing countries at the meeting did not have the flexibility to adjust their output, said Bob Yawger, director of energy futures at Mizuho. "They were hoping to slow the pace of production increases and halt the price decline. But that's not the case," he added.
A separate meeting on Saturday of the eight OPEC+ nations is expected to decide on an oil output increase for July.
Goldman Sachs analysts see the group of eight nations holding output steady after July's increase.
"However, we see risks to our OPEC8+ supply path as tilted to the upside, especially if compliance does not improve or if strong demand data surprises further to the upside," they added.
Upcoming demand for the summer driving season is significant, and with non-OPEC+ crude production flat in the first half of the year, coupled with the risk of Canadian wildfires hurting supply, demand for crude is stronger than OPEC+, said Janiv Shah, vice president of oil commodity market analysis at Rystad Energy.
On Wednesday, Chevron (CVX.N), opens a new tab , ended the oil production, service and procurement contracts it had to operate in Venezuela, but planned to keep its direct staff in the country, the sources said. Both benchmarks rose in the previous session on concerns about tighter supplies after the U.S. banned Chevron from exporting crude from Venezuela under new authorization for its assets there. (alg)
Source: Reuters
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