Petroleum up by more than 5% on surprise OPEC output cut

A surprise statement by OPEC (Company of the Petroleum Exporting Countries) and its allies consisting of Russia (a group referred to as OPEC+) to cut petroleum production pressed the energy products greater in the worldwide market on Monday early morning.

At 9.53 am on Monday, June Brent oil futures were at $84.07, up by 5.23 percent, and May petroleum futures on WTI were at $79.70, up by 5.33 percent.

April petroleum futures were trading at 6,577 on Multi Product Exchange (MCX) throughout preliminary trading versus the previous close of 6,199, up by 6.10 percent, and May futures were trading at 6,612 as versus the previous close of 6245, up by 5.88 percent.

Saudi to axe more.

On Sunday, OPEC+ revealed a more cut in petroleum production output of around 1.16 million barrels a day. The marketplace was not anticipating this production cut and it came as a surprise.

The significant part of this production cut will be contributed by Saudi Arabia at 5,00,000 barrels a day, followed by Iraq at 2,11,000 barrels a day, and the United Arab Emirates at 1,44,000 barrels a day.

Other members such as Kuwait and Kazakhstan are anticipated to contribute around 1,28,000 barrels a day and 78,000 barrels a day, respectively. The production cut will start in May and will be in force till completion of 2023.

At a time when financial activities are acquiring momentum in China, among the significant customers of petroleum, any production cut will result in tightness in the petroleum market.

Guar gum up.

April gas futures were trading at 174.90 on MCX versus the previous close of 183.80, down by 4.84 percent.

On the National Commodities and Derivatives Exchange (NCDEX), April guar gum agreements were trading at 11,867 throughout preliminary trading versus the previous close of 11,746, up by 1.03 percent.

April cottonseed oilcake futures were trading at 2,802 on NCDEX versus the previous close of 2,817, down by 0.53 percent.


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