Oil prices jump $3 as Opec+ plans to cut oil output targets by 100,000bpd

Oil prices rose more than $2 a barrel on Monday, extending gains as Opec+ producers agreed to cut oil output targets by 100,000bpd in October, according to a source.

Brent crude futures futures for November delivery rose $3.57 to $96.59 a barrel, a 3.8 per cent gain, by 12:24GMT. US West Texas Intermediate crude was up $2.13, or 2.5 per cent, at $89 after a 0.3 per cent gain in the previous session.

US markets are closed for a public holiday on Monday.

The chairman of the Organisation of the Petroleum Exporting Countries (Opec) and its allies, a group known as Opec+, said it would consider calling for an Opec and non-Opec ministerial meeting anytime to address market developments, if necessary..

A source said Oopec+ would hold its next meeting on October 5.

Russia, the world’s second-largest oil producer and a key Opec+ member, does not support a production cut at this time and the producer group is likely to decide to keep output steady, the Wall Street Journal reported on Sunday, citing unnamed sources.

Oil prices have fallen in the past three months from multi-year highs hit in March, pressured by concerns that interest rate increases and Covid-19 curbs in parts of China could slow global economic growth and dent oil demand.

Lockdown measures in China’s southern technology hub of Shenzhen eased on Monday as new infections showed signs of stabilising though the city remains on high vigilance.

Meanwhile, talks to revive the West’s 2015 nuclear deal with Iran, potentially providing a supply boost from Iranian crude returning to the market, has hit a new snag.

The White House on Friday rejected Iran’s call for a deal to be linked with closure of investigations by the UN nuclear watchdog, a Western diplomat said. — Reuters