Fuel Prices Set To Soar As Oil Producing Countries, Allies Decide To Extend Crude Production Cuts Into April

Oil prices gained considerably after the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) agreed to extend most oil output cuts into April.

The West Texas Intermediate for April delivery added $2.55 to settle at $63.83 a barrel on the New York Mercantile Exchange. Brent crude for May delivery increased $2.67 to close at $66.74 a barrel on the London ICE Futures Exchange, Xinhua news agency reported on Thursday (4 March).

OPEC+ approved the continuation of current production levels for April, except that Russia and Kazakhstan will be allowed to increase production by 130,000 and 20,000 barrels per day, respectively, the group said in a statement on Thursday.

Meanwhile, Saudi Arabia, the world's biggest oil exporter, said it would extend its voluntary oil output cut of 1 million barrels per day, and would decide in coming months when to gradually phase it out.

The move comes as the fuel prices are soaring in India to a record-high level. Opec+ decision on oil cuts could further raise the prices of petrol and diesel in India.

Addressing the CERAWeek conference by IHS Markit on Wednesday (5 March), Petroleum Minister Dharmendra Pradhan had urged the OPEC+ producers to boost output in order to fulfill their promise of stable crude markets.

Pradhan said India supported the OPEC+ decision to cut crude output last year when oil demand collapsed due to the spread of the coronavirus, reports India Today.

"[At] that point of time the producers assured us, especially OPEC assured the global market, that by the beginning of 2021 the demand would be coming back and production would be as usual. But I am sorry to say that production is yet to be normal by this time," Dharmendra Pradhan said.

(With inputs from IANS)