Oil was up Tuesday morning in Asia but climbed down from its highest levels in years hit during the previous session. Investors digested a decision from the Organization of the Petroleum Exporting Countries and allies (OPEC+) to uphold its current restraint on supply.
Brent oil futures were up 0.41% to $81.59 by 10:57 PM ET (2:57 AM GMT), remaining above the $80 mark. WTI futures were up 0.28% to $77.84.
OPEC+ said at its meeting on Monday that it would maintain an agreement for a gradual increase in oil production. The decision ignored calls from the US and India to increase output as the economic recovery from Covid-19 continues, if slowly, and boosts the fuel demand outlook.
The decision “will allow us to continue to normalize the market situation,” Russian Deputy Prime Minister Alexander Novak said during a speech at the meeting. The cartel will next meet to discuss production policy on Nov. 4.
The black liquid has rallied more than 50% in 2021 to date, which has contributed to inflationary pressures that crude importer nations are concerned will derail economic recovery.
However, the OPEC+ decision reflects “a lack of urgency within the group to ramp up output on the expected surplus in 2022 and limited capacity with key producers,” Barclays (LON:BARC) analyst Amarpreet Singh said in a note.
The jump in crude prices overnight “looks a bit outsized given the ministers just reaffirmed the decision announced in July but it shows how tight the market is”, the note added.
Investors now await US crude oil supply data from the American Petroleum Institute, due later in the day.