Oil Prices Surge Back as Iraq Announces Production Cut

Oil Prices Surge Back as Iraq Announces Production Cut

On Monday, oil prices surged back, covering more than half the Friday loss in prices. The rise is due to a pledge from major oil supplier, Iraq, to further increase its oil supply cuts and hopes for the economic package by the US back on the track.

UK’s Brent futures were 0.9%, or 40 cents up, reaching $44.80 per barrel, while US WTI (West Texas Intermediate) crude futures surged 1.2%, or 49 cents, trading at $41.71 a barrel, at 12:10 AM GMT. Last week, WTI closed at 2.4% above, and the Brent was up by 2.5%, despite both the standard benchmarks falling on Friday.

There were many reasons behind the surge, the primary being Iraq, which announced on Friday, that it would further reduce its oil production by 400,000 barrels a day, making the total reduction to 1.25Mbpd in July, in August and September, this year, to nutrify its overproduction of the last three months. The move is in alignment with the similar oil cut move by other OPEC countries, together known as OPEC+.

In the meantime, the world’s largest oil company, Saudi Aramco chief Amin Nasser, said that the oil demand in Asia is recovering after easing of restrictions and lockdown opening slowly in many nations.

At the same time, hopes for the stimulus package by the US grew as the both United States Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi agreed to restart deal talks to cover the rest of this year.

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