Natural Gas, WTI Oil, Brent Oil – Oil Markets Rally As OPEC+ Cuts Production

Key Insights

• Warm weather forecasts put pressure on natural gas. 
• Oil prices jumped after OPEC+ announced its surprising decision to cut production by 1.16 million bpd. 
• OPEC+ decision will serve as a long-term positive catalyst for oil markets. 

Natural Gas

Natural gas remained under pressure as traders focused on warm weather forecasts. The bulls will have to wait for positive catalysts as the market sentiment remains bearish.

WTI Oil

WTI oil rallied as traders reacted to the OPEC+ production cuts. OPEC+ countries announced additional output cuts of 1.16 million bpd. Previously, Russia cut oil production by 500,000 bpd to reduce the discount of its Urals oil to Brent oil. Saudi Arabia would reduce production by 500,000 bpd, while UAE, Kuwait, Iraq, Algeria, Oman, Kazakhstan, and Gabon would also participate in the cuts.

Brent Oil

Brent oil  jumped towards the $85 level. Analysts did not expect the OPEC+ decision, so oil producers managed to shock the market. According to OPEC+, the cuts would support market stability. For Russia, OPEC+ action is a retaliation against the oil price cap imposed by Western countries. Previously, some analysts expected that OPEC+ producers would use Russia’s problems to boost their market share. The new cuts show that OPEC+ maintains unity, which is bullish for oil markets.

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